What Can Be Paid For With Trust Funds?

One of the most important and common questions that Trustees ask is regarding the specific sorts of items that funds from a Special Needs Trust and Supplemental Needs Trust may purchase for the Beneficiary. Generally speaking, there are three important questions to keep in mind when making this decision: 1) Is the good or service provided by government benefits? 2) Is the distribution allowed by the Trust Agreement? 3) Is the distribution for the sole benefit of the Beneficiary?

Let’s say, for example, that the Beneficiary’s transport vehicle needs a repair to its accessible ramp. This repair cost can paid with trust funds if it is not covered through government assistance, if  this type of expense is allowed in the Trust Agreement, and if the distribution is for the sole benefit of the Beneficiary. In most cases, an accessible ramp repair fits the bill. Some other examples of common trust purchases are a new TV for the Beneficiary’s room, a hotel room rental on vacation, a class at a local community college, or non-government funded medical expenses such as massage therapy.

Things may get a little bit more confusing when it comes to paying for food and shelter. Government assistance is intended to cover housing and food, so in order for the Beneficiary to continue receiving all of his or her available funding, it is important to make sure that trust funds do not pay for groceries, regular restaurant meals, rent, utilities, or home insurance. Also, the Beneficiary should not receive cash directly from the trust. Legally speaking, these types of expenditures are an increase to the Beneficiary’s personal income, which triggers a reduction in government funding. However, one caveat to keep in mind is that when trust funds are used for food and shelter costs, there is a reduction of only $1 dollar to SSI benefits for every $3 dollars spent. For some beneficiaries, this tradeoff may actually be the best course of action. That is why it is helpful to consult with an attorney who specializes in Special and Supplemental Needs Trusts. Not only will the attorney explain the full range of goods and services that the trust may provide, he or she will also be able to hash out the best spending options for your given situation.

The National Association of Distinguished Counsel

NADC Badge-2015Luther M. Amundson, of Maser Amundson Boggio & Hendricks P.A., has been selected to the 2015 list as a member of the Nation’s Top One Percent by the National Association of Distinguished Counsel. NADC is an organization dedicated to promoting the highest standards of legal excellence. Its mission is to objectively recognize the attorneys who elevate the standards of the Bar and provide a benchmark for other lawyers to emulate.

Members are thoroughly vetted by a research team, selected by a blue ribbon panel of attorneys with podium status from independently neutral organizations, and approved by a judicial review board as exhibiting virtue in the practice of law. Due to the incredible selectivity of the appointment process, only the top one percent of attorneys in the United States are awarded membership in NADC. This elite class of advocates consists of the finest leaders of the legal profession from across the nation.

Important Issues For Trustees

Taking on the role of Trustee of a Special Needs Trust or Supplemental Needs Trust is an important responsibility. It is a Trustee’s duty to manage trust funds with careful discretion and disburse the funds for the sole benefit of the Beneficiary. The Trustee has the additional responsibility of seeing that the trust funds are properly invested and protected. Considering the scope of the undertaking, there are a few things potential Trustees should consider before accepting the role.

First, make sure that you have the opportunity to read the trust agreement and learn the specific duties unique to the trust nominating you as Trustee, such as what sorts of expenditures can be funded with trust assets, what are the legal responsibilities and duties you assume in the Trustee role, and whether the Trust provides for financial compensation for your role as Trustee. In addition, you should also establish the Grantor’s objective for creating the trust, the personal goals that you can help the Beneficiary achieve while you serve as Trustee, and how long your services as Trustee will be needed. Finally, taking time to become familiar with the Beneficiary’s needs, habits, and preferences is very important since it is the Trustee’s job to provide distributions to meet the Beneficiary’s supplemental needs.

If you are nominated as the Trustee in a Special Needs Trust or Supplemental Needs Trust, it is a good idea to consult with the attorney who drafted the trust agreement so the ins and outs of your duties may be fully clarified. As drafters of the trust, attorneys are ultimately your best source of answers for your preliminary questions. Keep in mind that it is important to be honest with yourself as you consider becoming a Trustee. If the trust agreement is unavailable for your review or if you do not feel that you have the time to undertake the Trustee role, it is wise to reconsider for your own good and the good of the Beneficiary.

What Is A Supplemental Needs Trust?

What Is A Supplemental Needs Trust?

A Supplemental Needs Trust is established for the benefit of a person with special needs as long as the Beneficiary is not over the age of 65. and residing in long-term care without a reasonable expectation of discharge. Use of a Supplemental Needs Trust allows the Beneficiaries, to retain their government assistance and also have funds available for opportunities like advanced medical treatments, education, and leisure activities. The objective behind establishing a Supplemental Needs Trust is similar to that of a Special Needs Trust, which the subject of a previous blog article.

The trust’s “Grantor,” which is the title given to the person who establishes the Supplemental Needs Trust, may be a parent, grandparent, actually anyone other than the Beneficiary or the Beneficiary’s spouse. Similarly, funds in the trust may come from anyone other than the Beneficiary or the Beneficiary’s spouse. Grantors typically establish the Supplemental Needs Trust with their own assets through a Will or through a “stand-alone” Supplemental Needs Trust. In doing so, the Grantor may appoint herself or another person as the Trustee, who has the responsibility to disburse funds to pay for expenses of the Beneficiary not covered by government assistance. Funds from the trust are not allowed to be disbursed directly to the Beneficiary. Disbursements from the Supplemental Needs Trust can be made only to the person or entity providing the goods or services to the Beneficiary. When the Beneficiary passes away, the funds or assets in the trust are not subject to claim by the government; it is disbursed according to the terms of the trust agreement; i.e., to family members, friends, non-profits, or whomever the Grantor designates.

The information in this article just is a short overview of what there is to know about Supplemental Needs Trusts. The best way to learn more about a Supplemental Needs Trust offers is to schedule a consultation with an attorney in your state who specializes in this area of practice.

What Is A Special Needs Trust?

A Special Needs Trust is a trust established to meet the supplemental needs of a person with a legally defined disability who is under the age of 65. The trust is funded with funds or assets which already legally belong to the disabled individual. These can be assets that are already in their name, a cause of action on behalf of the beneficiary which will provide a settlement amount or jury award to the beneficiary from a personal injury or medical malpractice action; accounts on which the beneficiary is already named as a beneficiary payee or joint tenant; or the beneficiary’s interest in a property settlement in a divorce action. A Special Needs Trust is commonly called a “first party trust” because the trust is funded with assets which belong to the beneficiary.

The Special Needs Trust may only be established by the beneficiary’s parents, Guardian or conservator or by court order. Whoever is establishing the trust is called the Grantor. Once funded the trust can be used to supplement the government assistance provided to the beneficiary. These benefits can include advanced medical treatments, education, leisure, furniture, appliances and activities. Once the trust is funded the Trustee is the person who manages the trust funds and makes disbursements on behalf of the beneficiary. Disbursements can only be made for the benefit of the beneficiary and not for the beneficiary’s spouse or family members. Because the funds belong to the beneficiary prior to their placement into the trust a Special Needs Trust must contain a “payback provision”. This provision provides that upon the death of the beneficiary the trustee must first satisfy any claim by the state for medical assistance benefits provided to the beneficiary.

Why Establish A Special Needs Trust Or Supplemental Needs Trust?

For families and friends of individuals with special needs, the primary concern is sustaining the individual financially. Not only do we want to ensure that their requirements for daily care are met, but we also want to make every effort to provide the best quality of life possible. One of the best ways to meet both goals is to establish either a Special Needs Trust or a Supplemental Needs Trust which allows a person with special needs to continue receiving government assistance for standard care while the trust money can be used for supplemental benefits such as advanced medical treatment, education, entertainment, and even vacations.

A key to success is knowing whether a Special Needs Trust or a Supplemental Needs Trust is right for the situation at hand, and this series is intended to inform readers about some of the basics and benefits of each. Because the laws and terminology involving trusts vary from state to state, it is helpful to consult with a local attorney who specializes in this area. If the Beneficiary lives outside the state of Minnesota, the special needs trust attorney will inform you about the options available for your loved one and help you take the steps necessary to safeguard their well-being.

Maser, Amundson, Boggio & Hendricks, P.A. Offices Consolidated

Effective June 30, 2014 the Maser, Amundson, Boggio & Hendricks, P.A.  Bloomington office location has consolidated with our Minneapolis office at:

6601 Lyndale Avenue South, Suite 320
Richfield, MN 55423

Minnesota – Not Florida, Not Hawaii – Is Healthiest State for Seniors

America’s Health Rankings Senior Report rated Minnesota the healthiest state in the nation for adults aged 65 and over — beating out Hawaii. And that retiree and snowbird haven, Florida? It came in 28th. The report grades states on 34 individual measures ranging from the amount of physical activity to prescription drug coverage to flu vaccinations. New Hampshire, Vermont, and Massachusetts round out the top five states. Minnesota stands out in a number of key indicators beyond volunteering. Seniors in the state have the lowest prevalence of cognitive problems, and they visit the dentist often. Seth Boffeli, spokesman for AARP Minnesota said the report underscores that decades of proactive efforts have paid off. He says Minnesota was ahead of the curve in moving towards community-based living for seniors and away from institutionalized nursing home care, when possible. “We saw early on that you could treat three people in the community for the same amount that it costs to put one person in nursing home,” Boffeli said. But, when needed, the state’s nursing home quality also scored high, according to the report. Another key indicator for Minnesota was a low rate of seniors facing “food insecurity” — a lack of access to sufficient and nutritious food. “We have made real efforts to increase the number of seniors who are eligible…for the state’s food assistance program to actually enroll,” said Lucinda Jesson, state Human Services Commissioner.

Source/more: Kaiser Health News

Ed.: Yet another reason to love my home state!

What Is The Difference Between A Health Care Directive And A POLST Form?

This question is one that many patients and their families ask. Even though a Health Care Directive and a Physician Orders for Life-Sustaining Treatment (POLST) form deliver similar instructions, it is important to know the particulars of both.

A Health Care Directive is a unique legal document that provides individuals and those close to them with peace of mind in the event of unforeseen circumstances like a car accident or a fall. If a person becomes incapacitated and is no longer able to communicate wishes for his or her health or personal care, a Health Care Directive allows him or her to convey treatment preferences to doctors and to appoint a Health Care Agent to act on his or her behalf. It is smart for all adults to have one prepared to ensure that their wishes are followed medically. Keep in mind that Health Care Directive laws and the definitions of key medical terms vary from state to state, which makes it particularly helpful to meet with an Elder Law attorney to ensure that your Health Care Directive has been drafted and executed properly.

A POLST form is different than a Health Care Directive primarily because it must be written and signed by a physician. When filling out the form, doctors converse directly with their patients and record directions about what to do if they become unable to speak for themselves. Examples of topics that doctors and patients discuss are who should make medical decisions on behalf of the patient (if a Health Care Agent has not already been appointed) and whether or not to attempt life-sustaining measures, such as CPR after cardiac arrest. While Health Care Directives are prepared in advance of medical issues, POLST forms are completed when a new critical medical condition arises or when changes to a current condition take place.

What makes a POLST form particularly useful is its ability to give end-of-life instructions when no Health Care Directive is available. However, those with a Health Care Directive can also complete a POLST form with their doctor since it adds more detail to the guidelines already established. Plus, POLST forms are easily recognizable – the doctors, nurses, and other medical professionals attending to patients can quickly navigate and spot the key information on the document.

For general information about Health Care Directives from the Minnesota Department of Health, visit www.health.state.mn.us/divs/fpc/profinfo/advdir.htm. If you would like more information about POLST forms, check out www.polst.org. To learn about state-specific laws and terms or to draft a Health Care Directive, be sure to consult with an Elder Law attorney.

2014 Changes to Minnesota’s Estate and Gift Taxes

Estate Tax

On March 21, 2014, Governor Dayton signed a tax bill (H.F. 1777; Minnesota Laws, Chapter 150) that will gradually increase the Minnesota estate tax exemption from $1.2 million for deaths in 2014 to $2.0 million for deaths in 2018 and thereafter.

Minnesota and the federal government impose an estate tax if you die with assets in excess of the exemption amount. There is no estate tax due if assets transfer directly to a surviving spouse. However, an estate tax is required when assets transfer to non-spouse beneficiaries when the decedent’s gross estate exceeds the applicable exemption amount.

The new Minnesota exemption amounts are as follows:

Year of Death

MN Exemption Amount









2018 and thereafter


The federal estate tax exemption is currently $5,320,000 for deaths in 2014 and the top federal rate is 40%. With proper estate planning, a married couple can transfer twice these exemption amounts free of estate tax to their beneficiaries.

Minnesota estate tax brackets have been simplified. The estate tax rates for 2014 begin at 9% on estates over the exemption amount and incrementally increase to a maximum of 16% on estates over $10,100,000. There is no longer a 41% estate tax bracket between $1,000,000 and $1,093,000. In 2013, the estate tax due on a $2.0 million estate was $99,600 and this amount will decrease to $78,000 for 2014 deaths, $60,000 for 2015, $40,000 for 2016, $20,000 for 2017 and no tax for 2018 or later deaths.

Gift Tax

In 2013, the Minnesota legislature levied a gift tax for taxable gifts made on or after July 1, 2013. H.F. 1777 retroactively repeals the Minnesota gift tax to its effective date of July 1, 2013. These changes do not affect the requirement to file a federal gift tax return. Taxable gifts (currently, any gift in excess of $14,000) made within three years of a decedent’s death will continue to be included in the taxable estate for purposes of determining Minnesota estate tax due.

The information included in this article is intended to provide general information regarding the 2014 changes to Minnesota estate and gift tax laws and does not constitute legal or tax advice. To review your personal estate planning situation, please contact Maser, Amundson, Boggio & Hendricks, P.A. to meet with an attorney.

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