Special Needs Trusts, ABLE Accounts, POA/Guardianship

Notes from September 21st - Assured Trust - Legal Tools for Special Needs

Assured Trust Company

ABLE Accounts:

• Created in 2014; it's a 529 (Section 529 of Tax Code)
• Purpose: "checking account" for regular expenses of an adult with special needs
• NOT a store of value (100K cap) — NOT a replacement for a special needs trust
• Needed because SSI recipients cannot have more than $2K in checking, but CAN have money in ABLE
• At death, residual ABLE balances may revert to the state
• You can convert a 529 to an ABLE account
• Uses: Education, training, disability-related living expenses, technology, transportation
• If you have more than $100K, your SSI will be suspended
• Annual contribution cap: ~$19,000/year (tied to federal gift tax limits)
• Open a Kansas ABLE account
• Secure Act 2.0 (2024): Qualifying disability age raised from 26 to 46

Special Needs Trust:

• Separate legal entity funded upon your death per your revocable trust
• Samantha recommends "stand alone" trust bearing the individual's name (easier to administer vs sub-trust)
• Wills trigger probate (6-18 months, costly)
• Types:
• Third-Party SNT: Established by parents/relatives; avoids Medicaid payback; parents control remainder beneficiaries
• First-Party SNT: Funded with beneficiary's own assets (settlements, GoFundMe); subject to Medicaid payback at death
• Funding: Life insurance, real estate, farmland, retirement accounts, inheritances
• Kansas follows federal estate thresholds (~$30M for couples); Illinois has ~$1M threshold — plan carefully with multi-state assets
• Medicare 5-year "lookback" — BUT contributions to a special needs trust are NOT included!
• ALL family members (including grandparents) must structure inheritances through SNT to prevent SSI disqualification

Trust Companies:

• Independent fiduciary chartered by the state, audited by 3rd party
• Corporate trustee takes over when both parents die
• Wells Fargo won't administer a trust < $2M; Assured Trust has no minimum
• Administration tools: Debit cards with spending restrictions (e.g., TrueLink card)
• Spending philosophy: Trust funds should be used for beneficiary's lifetime, not preserved for max growth

Guardianship vs Conservatorship vs Power of Attorney:

• At age 18, parents lose automatic legal authority. Plan before this milestone.
• Guardianship: Court controls the person's physical decisions. Court CAN appoint you guardian, but retains power at your death.
• Conservatorship: Only applies to money decisions, not physical health.
• Power of Attorney: Gives doctor permission to speak to you about child's health. BUT if child disagrees, doctor follows child's wishes.

Resources:

• SSA: Benefits for Children With Disabilities
• SSA: Benefits for Children
• SSA: Working while Disabled
• SSA: Understanding SSI
• National Academy of Elder Law Attorneys