Special Needs Trust out of money?

[Anonymous]

My BIL has a mental health handicap and lives in an apartment paid by Medicaid and SSDI. His expenses seem to be minimal; cigarettes, food in addition to food stamps, clothing, cable tv, internet, birthday gifts to family. His uncle is the trustee and now says the money is all gone. The Trust was funded with cash and real estate sold in 2011, balance was $400,000. In your experience, is it realistic the beneficiary required this much money over 12 years? Attempts for an accounting were denied and there’s no money to pay lawyers.

[Anonymous]

It’s around $2700/mo.

Realistically, it can’t be *that* much fraud. Could they have been more frugal? Yes. But your uncle isn’t living the high life on the money.

[Anonymous]

Anonymous wrote:It’s around $2700/mo.

Realistically, it can’t be *that* much fraud. Could they have been more frugal? Yes. But your uncle isn’t living the high life on the money.

Agree with this. I would guess food stamps were not actually used, and also that the apartment also wasn’t fully covered by SSDI. Overall that’s a pretty modest burn rate.

[Anonymous]

OP here. The apartment is very bare bones, an efficiency in a building with other SSDI recipients. The SSDI covers it. So the expenses are beyond the apartment.

[Anonymous]

Medicaid can have premiums and copays. And he might be seeing providers that don't take Medicaid. Other expenses might be transit, furniture, household items, and other utilities.

Still, this seems like an awful lot of money to be gone. What did your uncle think would happen when it ran out?

I think you need to accept that the money is gone, and work out how your BIL is going to afford to live. You could try to sue your uncle but you might not get anything if the money is already spent.

[Anonymous]

Bad situation but you have to move forward as best you can.

[Anonymous]

The uncle probably paid himself money to oversee the trust. While not illegal, it is pretty unethical. That’s why he doesn’t want you to see the finances.

[Anonymous]

You could try going to legal aid.

[Anonymous]

OP here. He often says he takes care of him “24/7” even though his needs are managed by a care agency (arranges transportation, takes him Shopping, group activities), so I suspect a lot of payments to himself. He just lives such a subsistence level I think a lot went to payments and generous gifts.

[Anonymous]

Anonymous wrote:You could try going to legal aid.

or maybe the attorney general?

[Anonymous]

400,000 is not a lot long term, especially if there are medical issues too. Were there medical issues. Why were there things like "birthday gifts to family." Nobody should want or expect a gift from someone living on a special needs trust. A card should have been more than enough for him to show love to family or just kind words in person. Cable TV? I would have spent some of the money to get him off cigarettes.

You are only allowed to pay yourself so much to be a trustee. that is not unethical. It is not a job most people would want to do for free even for a loved one. He does need to provide accounting, but I would not be hostile. Assume the best until you have other evidence. Find out the accounting and make sure he did not overpay himself.

You don't want to turn this into punishing the uncle for taking a job he probably didn't want and paying himself a legal and ethi9cal fee. One of my siblings I am not close to was setting a trust for her child who does not have special needs. I was not willing to to be a trustee. She had all these stipulations for a job I don't want and have no time for. I actually have a child with SN, a job and a spouse with heath issues and a teen who doesn't have special needs, but wares me down. No thanks.

[Anonymous]

Someone might have bene taking the money but usually if someone has guardianship there should be accountability. Social Security when I was the guardian to my MIL made me file a yearly report as did the courts.

However, medicaid doesn't cover everything, but it does seem high if its a bare bones apartment.

[Anonymous]

It’s 400k. But wasn’t the trust investing it the whole time? Something is not right with this. I would file a complaint and have it investigated.

[Anonymous]

Anonymous wrote:OP here. He often says he takes care of him “24/7” even though his needs are managed by a care agency (arranges transportation, takes him Shopping, group activities), so I suspect a lot of payments to himself. He just lives such a subsistence level I think a lot went to payments and generous gifts.

It's his child, not much you can do about it.

[Anonymous]

Anonymous wrote:My BIL has a mental health handicap and lives in an apartment paid by Medicaid and SSDI. His expenses seem to be minimal; cigarettes, food in addition to food stamps, clothing, cable tv, internet, birthday gifts to family. His uncle is the trustee and now says the money is all gone. The Trust was funded with cash and real estate sold in 2011, balance was $400,000. In your experience, is it realistic the beneficiary required this much money over 12 years? Attempts for an accounting were denied and there’s no money to pay lawyers.

Are you sure it isn’t SSI? SSI pays a lot less than SSDI, and probably wouldn’t cover many apartments no matter how barebones