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A transfer of assets, by gift or inheritance, to a loved one with a
disability can be depleted on expenses that might otherwise have been
covered by public assistance programs. Generally, a person with a disability
is entitled to both Supplemental Security Income (SSI) and Medicaid. Public
assistance benefits are based on the financial need of the person with a
disability, measured by a maximum allowable income and a maximum allowable
resource amount, excluding a residence and other specified assets.
A person with a disability will lose public assistance eligibility if his or
her total assets after receiving a gift, bequest, judgment or settlement
exceed the maximum allowable amount. The person with a disability will not
qualify for SSI or Medicaid until the assets are depleted.
Georgia Legislation
The Georgia Community Trust was authorized by the Georgia General Assembly
and in 1996 and created in January 1998 to help Georgia citizens provide for
the special needs of family members with a disability and preserve assets
for other family members.
Under the law, a community trust must be sponsored by a nonprofit
corporation, and trustees are required to have experience in business,
finance, investment management and providing services to persons with
disabilities, whether the impairment is congenital or acquired by accident,
injury, age or disease.
The Georgia Community Trust
The Georgia Community Trust enables an individual to transfer assets to the
trust for the benefit of a loved one with a disability. A judgment or
settlement payment can be made to the Georgia Community Trust for the
benefit of the person with the disability. Because trust assets are not
considered assets of the beneficiary, the person with the disability does
not forfeit basic care that may be received through public assistance
programs. The assets in the trust can then be used to enrich the life of the
person by covering expenses complementary to those benefits provided by
public assistance. These may include supplemental education, private
rehabilitation, recreation, entertainment, medical and diagnostic treatment
beyond Medicaid benefits, services of a caretaker and the purchase of
furniture for the person with the disability.
Ridgeview Institute Inc., a nonprofit behavioral health facility in Smyrna,
sponsors the Georgia Community Trust. The National Mental Health Association
in Georgia is a supporting sponsor organization.
How the Funds of the Trust Work
The Georgia Community Trust is considered one trust fund for investment and
management purposes. Individual beneficiaries of the fund have separate
accounts to which net income is credited in proportion to each beneficiary’s
contribution. The trust is divided into two funds – short- and long-term
investment.
Each donor creating a trust account appoints a co-trustee, usually a family
member, to advocate for the beneficiary with the disability and request
funds to cover particular expenses. The co-trustee is the liaison between
the trust and the beneficiary. The person transferring assets to the trust
pays an initial enrollment fee of $300, and a $400 fee to cover consultation
to the co-trustee is charged annually.
How Expenses are Paid for the Beneficiary
A member of the expenditure committee of the trustees approves all requests
to ensure that only expenditures permitted by the various public assistance
programs are authorized by the Georgia Community Trust. Income and principal
may be used only to provide non-cash benefits to the person beyond the basic
support offered by Medicaid and SSI for special needs of the disabled. When
these requirements are met, the disabled person retains eligibility for
public assistance.
Management of the Trust
The Georgia Community Trust is managed by a board of trustees comprised of
representatives from the community who have expertise in the care, treatment
and legal stewardship of individuals with disabilities.
Reprinted with permission from Making a Difference, Fall 2000.
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A special needs
trust is the only estate planning option that protects assets, enables the
beneficiary to receive goods and services from the estate, and still
preserves eligibility for government benefits. |
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