Special Needs Trust out of money?

[Anonymous]

400k should have lasted quite some time supplemented with the other money he was getting. Maybe savings accounts only yielded 1% recently, but investment accounts yielded way more than that.

It sounds like the uncle, at best, had no clue what he was doing. I would not trust him to use your money wisely, so I would not send him any money.

As to why you all split the estate instead of all the estate going to the child with special needs, I don’t get. But I guess it’s a good thing because the uncle probably would have gone through the rest anyway.

[Anonymous]

Anonymous wrote:$400,000 is not $4 million. This is not the same as retirement where you can live off interest. Interest was also historically low for the past decade. My savings account sometimes did not even pay 1%.

The uncle was probably not financially savvy but there are many more expenses than just food and rent. With a SN sibling, I would think the siblings would let all the proceeds of the house go to the SN adult when mom died.

How are you involved kn this?

Siblings should step up.

You are ignoring that the brother lives in a low income efficiency paid by SSI and Medicaid with other SSI residents. He isn’t living in a nice apartment, going out to dinner etc. Siblings should absolutely not throw more money down the uncles pocket!

[Anonymous]

Anonymous wrote:You and your sibling need to have a lawyer review everything before you send any money to your uncle. You can hire an attorney to represent your brother and look into whether the uncle broke his fiduciary responsibility.

An ABLE account or special needs trust does not trigger Medicaid or other social services. It doesn’t show up as income or assets owned by the disabled person. This is the point of these trusts. It’s also why the accounts can’t be used for rent, food, utilities etc.

Unless the uncle was using the trust to pay for residential treatment facilities or in home personal caregivers or private psychiatrists that don’t take Medicaid then something is wrong.

A lot of people are responding who are conflating Medicaid's long-term care rules around assets and trusts, but the bolded above is accurate for SN populations with these trusts. I would want to understand more about the burn rate, whether the money was in investments that lost money, etc... and I think if you wanted to keep things from veering into accusations, you could say that you need to understand what kind of financial support is needed going forward for planning purposes and thus need to understand what the monthly and annual expenses are.

[Anonymous]

Anonymous wrote:You and your sibling need to have a lawyer review everything before you send any money to your uncle. You can hire an attorney to represent your brother and look into whether the uncle broke his fiduciary responsibility.

An ABLE account or special needs trust does not trigger Medicaid or other social services. It doesn’t show up as income or assets owned by the disabled person. This is the point of these trusts. It’s also why the accounts can’t be used for rent, food, utilities etc.

Unless the uncle was using the trust to pay for residential treatment facilities or in home personal caregivers or private psychiatrists that don’t take Medicaid then something is wrong.

It’s not clear that there is an actual special needs trust. And the recipient of the $400k came into the money after he was receiving Medicaid funded care so it likely would be subject to the five year look back period. The inheritance was 12 years ago. That means that less than $2800 per month was being spent on a mentally ill person’s rent, food, clothing, possibly medical expenses and living expenses. I know some can do it for less, that’s really not extravagant by any means.

[Anonymous]

OP here. An official SNT exists, it went through probate with the rest of the estate and is a party on the real estate filings.

We are not being asked for money to shore up the trust, thankfully. The uncles attitude is very casual, matter of fact, says “the trust ran out of money,” without assigning himself any responsibility.

The Medicaid look back thing isn’t an issue here. His Medicaid and SSI do cover the apartment and utilities. The trust paid for things like cable, was supposed to pay for trips, any classes, hobbies. I’m just trying to get my head around how the money went so fast.

His condition does not require services like rehab or any equipment or anything like that which would require large regular outlays from
The trust.

[Anonymous]

^SSDI

[Anonymous]

Anonymous wrote:OP here. An official SNT exists, it went through probate with the rest of the estate and is a party on the real estate filings.

We are not being asked for money to shore up the trust, thankfully. The uncles attitude is very casual, matter of fact, says “the trust ran out of money,” without assigning himself any responsibility.

The Medicaid look back thing isn’t an issue here. His Medicaid and SSI do cover the apartment and utilities. The trust paid for things like cable, was supposed to pay for trips, any classes, hobbies. I’m just trying to get my head around how the money went so fast.

His condition does not require services like rehab or any equipment or anything like that which would require large regular outlays from
The trust.

This sounds really horrible. I keep thinking about this thread. I like the suggestion above about needing to see the records to understand how to set up better in the future. And also to understand what expenditures he is used to that he is not going to be able to get going forward. I have no idea what your options are but contacting the lawyer who wrote the trust or a legal aid society seems like a very reasonable step. How sad if he can’t even have cable going forward because the uncle was paying himself to administer the trust. Is that his father? How can anyone be so casual about this

[Anonymous]

OP is your husband and or the other sibling listed as secondary beneficiaries? Usually a SNT stipulates who the beneficiaries are or that the trust goes to the estate and heirs of the creator upon the death of the SN beneficiary.

The uncle has either already taken the money or has been moving it into his accounts and businesses.

If the siblings are secondary beneficiaries then you have legal standing. Annual updates and accounting of trust assets and spend is a basic fiduciary responsibility. A lawyer will start there compelling the uncle to provide accounting. If he still refuses, the court can compel bank statements so you can see where the money went.

[Anonymous]

Anonymous wrote:^SSDI

Are you sure he has SSDI and not SSI? SSDI pays a lot more, but requires work history

[Anonymous]

Anonymous wrote:OP is your husband and or the other sibling listed as secondary beneficiaries? Usually a SNT stipulates who the beneficiaries are or that the trust goes to the estate and heirs of the creator upon the death of the SN beneficiary.

The uncle has either already taken the money or has been moving it into his accounts and businesses.

If the siblings are secondary beneficiaries then you have legal standing. Annual updates and accounting of trust assets and spend is a basic fiduciary responsibility. A lawyer will start there compelling the uncle to provide accounting. If he still refuses, the court can compel bank statements so you can see where the money went.

OP here. Yes, the other two siblings do receive the trust assets upon the death of the beneficiary, according to the trust document. Do people take this angle (claim a legal interest and thus have greater access) when the beneficiary is still alive? I’d think the siblings would feel greedy asking where the money went that they would not be entitled to unless their brother died. Yes, I am asking this, but more from concern for the beneficiary right now.

The lawyer who put the will and the SNT together is deceased. The whole estate was not put in a trust apart from the 1/3 share in the SNT, so it had to be probated and it cost a lot in estate taxes, etc. at the time. Incompetence from the start.

The SSDI is like $200 a month and is based on his very short (teens-early 20s) work history in low wage jobs.

[Anonymous]

^im not sure if it’s SSI or ssdi l. It’s just a tiny payment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP is your husband and or the other sibling listed as secondary beneficiaries? Usually a SNT stipulates who the beneficiaries are or that the trust goes to the estate and heirs of the creator upon the death of the SN beneficiary.

The uncle has either already taken the money or has been moving it into his accounts and businesses.

If the siblings are secondary beneficiaries then you have legal standing. Annual updates and accounting of trust assets and spend is a basic fiduciary responsibility. A lawyer will start there compelling the uncle to provide accounting. If he still refuses, the court can compel bank statements so you can see where the money went.

OP here. Yes, the other two siblings do receive the trust assets upon the death of the beneficiary, according to the trust document. Do people take this angle (claim a legal interest and thus have greater access) when the beneficiary is still alive? I’d think the siblings would feel greedy asking where the money went that they would not be entitled to unless their brother died. Yes, I am asking this, but more from concern for the beneficiary right now.

The lawyer who put the will and the SNT together is deceased. The whole estate was not put in a trust apart from the 1/3 share in the SNT, so it had to be probated and it cost a lot in estate taxes, etc. at the time. Incompetence from the start.

The SSDI is like $200 a month and is based on his very short (teens-early 20s) work history in low wage jobs.

With the additional information, I do agree that the money went really fast. With regard to an accounting, only beneficiaries (or legal guardians of beneficiaries) have standing to request an accounting. That would seem to include the brothers. Also some states require periodic accountings.

Here’s your problem. In your first post you say the accounting was denied. You don’t say by whom or why. Regardless, if that’s the case, you’re going to need lawyers which you say you don’t have the money for.

There may be a means to get an attorney to take the case on a pro bono basis. But honestly this isn’t one I’d likely consider unless there is objective reason to believe that the uncle embezzled the money, such as significant lifestyle changes. Even if you win (and it could be protracted and expensive litigation, which the trust may be required to pay for the trustees legal expenses), you aren’t likely to gain any tangible benefit. Pro bono resources are scarce and reserved for where you can do actual good.


Second, even if there were some bad decisions, unless the trustee has money to cover any judgment (which will require expensive litigation), there’s probably no point in pursuing now. The time to pursue was earlier when you could have tried to remove the trustee and preserve trust assets.

[Anonymous]

I may be mistaken, but my guess is that when OP refers to Medicaid, that they mean the health coverage the relative is receiving. I had a sibling with a developmental disability who was on SSI and Medicaid, then moved to Medicare after some eyars. They lived in a group home and their trust was very modest, mainly hair treatments and some medical visits not covered by Medicare.

[Anonymous]

This sounds awful.

But if the money is gone it's gone. There's nothing to be done now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP is your husband and or the other sibling listed as secondary beneficiaries? Usually a SNT stipulates who the beneficiaries are or that the trust goes to the estate and heirs of the creator upon the death of the SN beneficiary.

The uncle has either already taken the money or has been moving it into his accounts and businesses.

If the siblings are secondary beneficiaries then you have legal standing. Annual updates and accounting of trust assets and spend is a basic fiduciary responsibility. A lawyer will start there compelling the uncle to provide accounting. If he still refuses, the court can compel bank statements so you can see where the money went.

OP here. Yes, the other two siblings do receive the trust assets upon the death of the beneficiary, according to the trust document. Do people take this angle (claim a legal interest and thus have greater access) when the beneficiary is still alive? I’d think the siblings would feel greedy asking where the money went that they would not be entitled to unless their brother died. Yes, I am asking this, but more from concern for the beneficiary right now.

The lawyer who put the will and the SNT together is deceased. The whole estate was not put in a trust apart from the 1/3 share in the SNT, so it had to be probated and it cost a lot in estate taxes, etc. at the time. Incompetence from the start.

The SSDI is like $200 a month and is based on his very short (teens-early 20s) work history in low wage jobs.

OP, you are right something is way off here. His needs outside fo SSI and Medicaid sound very modest, like maybe a few thousand a year? If you have the money to do so it sounds like you should speak with an attorney who is familiar with special needs trusts and see what can be done. I do like the angle of asking for records so that you can understand the needs going forward. Maybe try that first.