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Additional Information for Beneficiaries of a Special Needs Trust

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Additional information for beneficiaries

Two weeks ago we offered some suggestions to help beneficiaries of special needs trusts better understand how their trust might work. At the end of that article we solicited questions we still needed to address. Based on that feedback, we have some additional information for beneficiaries of special needs trusts.

If I don’t receive SSI, are the rules different?

Supplemental Security Income (SSI) has the most commonly-cited eligibility rules. But maybe you, beneficiary, don’t receive SSI. So to the strictures on special needs trusts still apply to you?

They might — or they might, but in a slightly different way. Direct payments by the trust for food and shelter items can have an effect on SSI. In some states, they can have a separate (but similar) effect on Medicaid eligibility.

The SSI concept is  “in-kind support and maintenance” (usually abbreviated as ISM). The rules for SSI are both particular and peculiar — and we don’t want to try to explain them here. If you’re interested, check out the Trustee’s Handbook offered by the Special Needs Alliance (and note that the figures get updated every year). Basically, the ISM concept means that some kinds of payments — especially for food and shelter — can reduce, but not usually eliminate, SSI benefits.

In states that apply similar rules, the eligibility for Medicaid can have a similar approach. And it might not just be food and shelter payments. So check with your trustee to make sure they know what your state Medicaid rules are. And have them tell you, too: additional information for beneficiaries is always good.

What about Section 8 housing benefits?

Again, there are some different rules. To make things more complicated, those rules are undergoing change even as we write.

Direct payments by your special needs trust shouldn’t eliminate your Section 8 assistance. They can, however, increase your rent. If the trust makes regular and recurring payments (like the cell phone bill every month, for example), those payments can be counted as income. That’s true even though the beneficiary never handled the funds. But here’s the useful additional information for beneficiaries: the effect may be just to increase rent by 30% of the monthly payment.

Beneficiaries — and trustees — often work overtime trying to make sure there’s no effect on benefits. Sometimes it’s appropriate to balance the benefit and the effect. In a given case, you might be better off with payment of some of the monthly bills even if there is a slight increase in rent. Review and discuss these calculations with your trustee. Make sure the trustee’s decisions consider and balance your interests.

Can I have more control over my trustee?

One of the main concepts in special needs trusts is that the beneficiary has no right to demand distributions from the trust. If you could, then the trust’s assets and income could perhaps prevent you from receiving government benefits.

But that doesn’t mean you’re frozen out of information about the trust. In Arizona, as in most states, the beneficiary of any trust has some specific rights. Those rights are not lost just because the trust is a “special needs” trust.

First of all, there’s no consistent, really clear definition of the term “special needs” trust. That’s been a confusing issue for many beneficiaries (and not a few trustees). But for virtually every trust, the beneficiary has the right to demand a copy of the trust (or at least the relevant parts of the trust) and an annual accounting by the trustee. A good trustee will usually be willing to provide accountings more frequently, and perhaps even on demand.

A copy of the trust can provide additional information for beneficiaries. A review can tell you what limitations the trust itself imposes on the trustee — and they might be more strict than the limitations from SSI, Medicaid and other programs.

Perhaps the trust is large enough to permit you to skip public benefits altogether. If so, a discussion with the trustee is in order. You might even retain your own attorney to advocate for your wishes — the trust might well be able to pay for your legal advice. Your attorney will almost certainly want to start with the trust document and a recent trust accounting.

What other things should I look for?

The trust document can provide a lot of useful information. It might, for example, spell out the guiding principles governing the trustee’s behavior. It also might encourage the trustee to seek outside assistance and advocacy for your benefit.

Here’s one thing to look for: does the trust explicitly permit contributions to an ABLE Act account? In some cases, this can give the beneficiary a tremendous opportunity to manage their own life (with much less supervision). Even if it’s not in the trust document, it might still be an option.

And there are other things to look for. Talk with an experienced attorney about how to better understand (and benefit from) your special needs trust. And keep working with your trustee.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.