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Welcome, everybody. We are just waiting for a few more folks to join us, and then we'll get started in about a minute or so.

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I see there's a question. Do you see the question? Let us see. about accessing access captions and transcripts or transcripts.

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Okay. We're going to break 100. We are. Thank you, everybody.

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All righty. It looks like we have 102 folks in with us today.

00:02:10	SPEAKER_00
folks in with us today. Thank you, everybody, for joining. Thank you for joining us for Kessler Foundation's planned giving for loved ones with disabilities, protecting benefits and securing their future. Our first webinar, this is our first webinar series in our 2026 Legacy Planning Series, so stay tuned for additional invites throughout the course of the year. My name is Shelby Nielsen. I am the Assistant Director of Individual Giving and Owner Engagement here at Kessler Foundation. I have the privilege of working with individuals and families who care deeply about creating lasting impact, and today's topic speaks directly to that. Before we begin, I just want to say thank you all for taking the time to be with us today. Whether you're a donor, parent, caregiver, family member, professional advisor, advocate, we hope this session today leaves you feeling a bit more informed and better equipped to take next steps. It's now my pleasure to introduce to you our speaker, Jonathan Godema, Legacy Planning Advisor here at Kessler Foundation. As an attorney, Jonathan brings deep expertise in legacy planning, and he works closely with families to help them align thoughtful planning with their values. while safeguarding critical benefits and creating a secure future for their loved ones. Jonathan will talk us through key considerations, common planning tools, and practical strategies to help you navigate this important process. We will leave a few moments at the end of this session today for questions. Some of you have already been utilizing our Q &A function, so please go ahead and continue to do so. That is how we will go through and answer the questions towards the end of this session. Without further ado, I'll hand it over to Jonathan. Thank you, Jonathan, for being here with us today.

00:03:57	SPEAKER_02
Okay. Thank you, Shelby. And thank you to the Kessler Foundation. Just give me a second while I bring up the PowerPoint. Okay. Thank you, everybody, for participating. There are a lot of people on this call. There are a lot of people registered. So we actually had over 300 registered. So we will do our best to get to questions. It's probably impossible to get to all questions. And so go ahead and put the questions into the Q &A. Shelby will be monitoring the Q &A. And if sometimes it's appropriate while I'm talking, she said we have a question. But like Shelby mentioned, this is the beginning of a year process. I have been working with the Kesso Foundation last year, but this year we're going to do a lot of programming. And the response to this one has already been so incredible that. Our assumption is we're going to be doing a bunch of programs, and a lot of it will be based on the questions you put out there today. All right, so you heard about me.

00:04:58	SPEAKER_02
heard about me. I'm an attorney. I've been a lawyer since 1994. I've done a lot of different things, mainly at this point in my career. I work with individuals. I work with not -for -profits, too, like Kessler as a resource to individuals. And any way we can help. And of course, I also, in the area of plan giving, which is legacy giving, we're also helping individuals in that regard. So today's presentation, when I give speeches, my practice as an attorney is more general in terms of states, planning, trust, taxes. And usually when I give a talk, I like to start from the beginning. So if I give a talk about taxes, I'm going to... go from the being, okay, what is income? And I go step by step. And I was doing that here. But to tell you the truth is that I started to realize that there's just so much to cover. And so we're going to really lightly touch on the landscape of benefits and challenges for disability planning, but challenges of staying qualified for Medicaid and things like that. I'm not going to go into those details. I'm going to focus today, and I think we'll have just enough time. We have a hard cutoff at 1 .15. We are going to cover the main methods and some methods out there, different types of trusts that can benefit you. So we're going to talk about the landscape, but very briefly. I actually had about 20. 20, 25 slides at the beginning just to go step -by -step to different issues, and I realized I will never get to the techniques. So we're going to review some of the basic techniques, why we need these techniques, and then we're going to go into some of the specific ones. QIT Miller Trust, and that may not be so applicable to this audience. ABLE Accounts, which I believe will be very, very important if you're not familiar with them, and there are some recent changes which may... Now, you may be qualified or you may know somebody who now qualifies for an ABLE account. And then special needs trust. Special needs trusts are a huge issue. That I have the most experience with. And there are just so many opportunities and so much understanding people need to know about them. And then we will actually talk to somebody a little bit at the end about some general spend -down principles issues. Okay. Before we go further, Shelby, let's do some of the polling that I gave you. It would be a little helpful for me to know maybe where people are from and some of the other questions we have. Okay. So since we have so many people on this call, we just want to get a little idea of the location people are coming from.

00:07:58	SPEAKER_02
location people are coming from. Okay, we're going to see a bunch coming in. Other states.

00:08:06	SPEAKER_00
A lot, New Jersey.

00:08:08	SPEAKER_02
Yes, New Jersey, New York, and I'm an attorney for New York and New Jersey, so that is good. So I've obviously more experience in New York and New Jersey.

00:08:19	SPEAKER_02
But like I suspected, I see people from around the country. So I do want to cover not just New York and New Jersey. So there's some issues, particularly the QIT trust. is a trust that may apply to, it doesn't apply necessarily to New York and New Jersey, but it does apply to some other states. Okay, so, and then, great. So New Jersey is the biggest group, and New York, but we do have people representing some other. Those who've been in MESH for several years, I think this will be very helpful. Great, and then,

00:08:51	SPEAKER_00
and then, as far as where are you in the process of planning for individual assets and their family assets in the long -term disability situation? We have 15 % of folks have already done a lot of planning. 21 % of folks have started but need to do more.

00:09:11	SPEAKER_00
And 65 % are at the beginning trying to figuring out what their options are.

00:09:15	SPEAKER_02
Great. All right. So perfect. This was very helpful to me.

00:09:19	SPEAKER_01
Okay. So I'm not going to spend time on this.

00:09:21	SPEAKER_02
not going to spend time on this. I think everybody has an idea about this. SSI is extremely important. Of course, Medicaid can be extremely important.

00:09:31	SPEAKER_02
DI is more – again, it's important, different roles. I'm not going to – I spent a lot of time getting ready to try to go through all this, and I realized it's such a maze, and we'll never get to the next stuff. So we – generally speaking, we know that basically here's the issue. I'm just jumping to – like I said, I had like 20 slides or more just to get to this point, and I said, you know what, let's just get there, and let's talk about some of the solutions. Again, issue being too many assets, you might lose SSI and or Medicaid, too much income. You can either reduce or lose benefits depending on the state you're in or improper spending. Again, if you're making gifts or stuff like that, we'll talk about what's proper, what's improper. Again, a disruption of eligibility. Okay, so we're at the plan. This next couple slides, it's just an overview of planning. techniques, why they're important. So if you have this issue with monthly cash flow, meaning you have too much monthly cash flow, too high for Medicaid, in some states you literally get kicked out of Medicaid if you're a dollar over in those states, income cap states. So that's something we're going to talk about, a Miller Trust. Again, I have the list here. We get to the states where that might apply. And so if you're in one of those states, you're going to want to pay attention to the Miller Trust. If you're in what I can call a spend -down state, New York and New Jersey, meaning as your income exceeds the limits, you're going to have to suspend it towards the CARE. But again, a pooled S &T. S &T stands for Special Needs Trust. We're going to go a lot into special needs trusts. Very, very important. And the goal is, of course, to redirect income without losing eligibility. Second big problem, assets, inheritance, savings problems. Too much assets in the name of the person who needs to be qualified or is qualified, wants to be qualified for these different benefits. SSI, Medicaid, SSDI possibly. SSDI is more about work history. But anyway, so assets can disqualify the benefits. And there's – again, we're going to talk about if it's family assets, not the individuals. Family assets is a certain type of – SNT stands for, again, special needs trust, something called third party. I'm going to go a lot into what that is. And then there's – if it's individuals' assets. So you can't just – Give it away. Again, we'll talk about that too. You can't just say, well, just move it to my spouse's name or to a child or somebody else. That will be disqualifying and that will not help you. That will just hurt you. But there are options. And we will go into the first party, S &T, Special Needs Trust for a pooled S &T, pooled trust. Again, the goal. In this situation, can we protect these assets while maintaining benefits? And we're going to go into some other planning opportunities.

00:12:48	SPEAKER_02
Okay, and then flexibility in regards to daily living and independence, access to funds for everyday life. Again, if we're talking about somebody who is already qualified and wants to maintain being qualified for these various benefits, how do we do that? So the ABLE account, ABLE account is an amazing, relatively new opportunity. I think it's about 12 years old, but there's some changes. I'm going to go into that. Special needs trust can help here a little bit, but we'll go into that. Really, I'm going to go through that a lot. That's a very big part of today's presentation. And the goal, of course, is to allow for flexible independent spending. Again, that doesn't cause any disqualification issues. Okay, I'm just going to touch on the income cap states. These are states where if the income that the person who needs to qualify or stay qualified, if their income exceeds a certain amount, you're out, period. You're over by $1. New York and New Jersey, you wouldn't be out, but you would have to be spending that extra income on your care. So just in terms of elder care planning, for example, A lot of people say that we figure out that when I sit down with individuals that do elder care planning, we find, well, the Social Security, if they ever had to qualify for Medicaid, their income's too high. I said, well, your income may be, but if you have no assets, if your assets get spent down and your income's above the minimum Medicaid qualification levels, you'll just have to be spending that extra income on your care. That's like a New York and New Jersey. That's called spend -down states. income cap state, that social security would just really block you. So you'd have to do something. Actually, I actually had a client where I discussed with him and he was looking, you likely to need Medicaid. And I told him to take his social security right away.

00:14:52	SPEAKER_02
told him to take his social security right away. He was already 70 or 71. He was delaying his social security, but his social security would have started. creating disqualification issues. It wouldn't have disqualified them if you need long -term care, but it could have prevented them from getting interim Medicaid benefits. If there's an income limit for SSI, for example, it's 300 % of SSIs,

00:15:17	SPEAKER_02
which basically we're talking about $2 ,800 to $3 ,000. That's 26 limits. The government has a lien for Medicaid payback on this type of asset. a factor. There is an option or two that it's not a factor. And again, you want to know what those are. But for the quit trust, it is subject to Medicaid payback. And here are the states. Florida, Texas, Georgia, Arizona, Tennessee, Alabama, Missouri, Oklahoma, Nevada, and Colorado. I did the abbreviations myself because I want to fit it online. All right, so that – and let's just know what this quit trust – it almost doesn't even matter what you can spend it on because at least you're getting the main government benefits that you need. Getting before things like clothing, toiletries, personal items, small discretionary spending. More – it could be health insurance premiums. It could be Medicaid, Medicare, Part B and D, supplemental, Medigap -type policy. Could be for medical expenses, again, not covered by Medicaid. Prescription drugs, if not covered, again, therapy services, dental, vision. So you've got a lot of things here. And the other issue is the spousal allowance. So if the individual was married, and so it only applies to the individual who is the person who needs to qualify or stay qualified for Medicaid.

00:16:52	SPEAKER_02
So if that person's income, that is the problem. The spouse, if the spouse has their own income that's above, it's not counted. It's not counting toward them. So if we have, let's say, the community spouse, if you have a community spouse, then we have some extra options here. Now, there's something called a minimum monthly. This is just for those states where this is applicable. Medicaid and disabled, let's say the Medicaid disabled spouse. Their income is $3 ,500, so it's already too high. The community spouse's income is lower. If it was flipped around, it wouldn't be an issue. But in this case, obviously, this is where the issue comes up. So there's an allowance of $3 ,800 a month that can go to the community spouse. So what happens? The community spouse is able to get that $3 ,800. So currently it has $1 ,500, and the shortfall is $2 ,300. They should put in their beneficiaries. Okay, if there's any funds remaining, they can go to individuals, go to not -for -profits, but it should be into the trust. So obviously the trust, it could end up being the estate, which is not the end of the world, or it could go to name beneficiaries, individuals, charitable institutions. Okay, so I think I want to get through that quickly because I feel that most of us... probably less of an issue. I want to get to what I feel are the really big issues that we need to be knowledgeable about. The next big topic, and this really applies throughout the country, is the ABLE account. The ABLE account, this is a great innovation. It means achieving a better life experience account. We know that the intent was to offer a tax advantage savings account for individuals with disabilities. And you're going to see this is similar to like a 529 plan, which is usually for college. This is now for individuals with disabilities. And this is not necessarily people who are qualified for various government benefits. You'll see that this is a little broader. But the key for our planning purposes, it does allow

00:19:14	SPEAKER_02
To save money, put aside money without losing SSI or Medicaid. And you get some tax advantages, which I will go more into. For up to $100 ,000, it is protected for SSI. So you can continue with SSI.

00:19:32	SPEAKER_02
You can continue with SSI with up to $100 ,000 in this ABLE account. And you're good. Medicaid, there's actually no cap. So the entire ABLE account is disregarded. So then it comes to the question, how much does the legislation let you put into your ABLE account? And again, it's going to follow the same rules as the 529 plans, which depends on the state. So some states will allow, I think I put down here, like some states may be up to 500 ,000. Other states may be around 300 ,000. Could eventually end up in that count again. So SSI is not an issue. Because people sometimes graduate from SSI, and depending on their situation, maybe a disabled adult, I forgot there's a DAC, disabled adult child. There are situations where people, they'll start off SSI, but eventually they'll be put on SSDI. So again, they have that ability now to have this account. So it's like a 529 college plan, but for disability -related expenses. What's really important, and again, this is... It really relates more to what I do, the planning I do with people and a lot of talks I give. So 529 plan, and now it's for age 46. So actually there are people maybe on this call who say, wait a second. I know about ABLE, but I wasn't qualified because my disability didn't kick in until I was over 26. Well, now you have an opportunity.

00:21:06	SPEAKER_02
So if you're already receiving SSI or SSDI, you're in. You can get an ABLE account. Or, and this is really interesting, you meet the social security disability criteria. I'm going to go a little bit more into this. And so let's look at the definition, and I'll give you a little more about this. And actually, one of the people, I don't know if they're participating, but they're going to watch their video, somebody forwarded an article, a really nice article about pediatricians encouraging to let them know the patients, younger patients who may qualify for this type of account already, even at a young age. I thought that was a very interesting perspective. So this is not just classic adult type of disability. This could be something starting in childhood. This is a great option. So the definition, so social security definition. is unable to engage in substantial work. It's due to a medically determinable impairment, and it's expected to last 12 months or result in death. I'm sorry, I'm just using the straight language, how they define it. Okay, so let's look a little bit deeper. So what do you have to show to qualify for an able -accounting? Really, there's some qualifications here. So medical documentation. A diagnosis. I just put in here, you know, autism spectrum disorder. So I have my nephew. I don't know if you qualify for this. I have a nephew who has his ASD. And he is 18, turning 19. So he's diagnosed. Okay.

00:22:51	SPEAKER_02
And, of course, you have to be able to just show the evidence, whatever doctors have to prove that this is the case. But this is not. Only the qualifications. There has to be some sort of functional limitations, significant limitations, and communication, social interaction, concentration, focus, adapting to changes, managing death of life. Sometimes when the law is open like this, it's not a black and white test. Sometimes we prefer black and white because then we know either we're in or we're out. My guess is that if there's a diagnosis and there's some limitations, you could probably go ahead and do an ABLE account. For sure, the companies that are offering them, we're going to talk about those companies, they for sure will also want to see this proof. But I think it's pretty easy to get it going.

00:23:54	SPEAKER_02
Okay, a little more on ABLE accounts. Okay, so I mentioned already, I just mentioned again. Again, you might not have qualified because as of last year, your disability had to begin before age 26. But now your disability, if it started before age 46, then you can go ahead and you can utilize this interesting option. There are contribution limits, meaning how much you can put into the account annually. It's actually now up to 20 ,000 a year. Last year, it was 18 ,000. So now you have a little more room. So you can add 20 ,000 a year to this account. It could come from family, friends, or individuals. So again, none of this, and none of this is going to affect any coverage of SSI, other social security, SSDI. This is not going to affect anything. This is all, and if the person's working, they can contribute more. So it's called able -to -work rules. Okay, so there's another – a little more than $15 ,000. So you can, in theory, somebody in the family could add $20 ,000. If the person with a disability is working, they can add their own $15 ,000 plus. So you can add up to $35 ,000 a year into this tax -advantaged account.

00:25:11	SPEAKER_02
Okay, maximum account size. I think I mentioned already. Let's just reiterate it. So it's based on a 529 state. State college savings program limits. So it ranges between $300 ,000 and $500 ,000. New York, New Jersey, it's at the $500 ,000.

00:25:30	SPEAKER_02
And these are – I never understood this, but the 529 rules, each state sets their own rules. So those rules also apply to these ABLE accounts, and some states apply more. You can go ahead. We're going to talk about that, I think, on the next slide or slide after that. Which state you want to choose an ABLE account? So every ABLE account is going to be affiliated with a certain state. So you'll see that some are really national, but again, it's always based on the state of origin. And there's some trade -offs if you go ahead and go to an out -of -state one. One of the positive trade -offs, let's say your state is on the lower end, but you decide that we want to get a maximum amount into this ABLE account. Again, that's a... strategic decision that you may or may not want to decide. Let's say you want to decide that, you could actually go ahead and pick an ABLE program that is in a state that has a higher limit.

00:26:30	SPEAKER_02
Now, Medicaid is generally unaffected by the total balance. So that's, again, I mentioned already, there's a $100 ,000 balance max for SSI, but generally speaking, but generally because you have to double check the state of the ABLE participant. So that's kind of important. Again, whatever state you're in, if you're an ABLE account participant, you have to double -check that. Make sure that there may be a couple of states that do have a limit for Medicaid purposes. Okay, so the issue is SSI is no longer a factor. Quite often, it is no longer a factor. family assets can get into an ABLE account. Again, it's a strategic decision, as you're going to see in a slide or two. Do we want to put maximum amount in this account? Because it is great for the individual. I mean, it's really a phenomenal opportunity to improve the life of the participant. They have access to funds, which are not disqualifying them. But there's some other factors, so we'll get there.

00:27:42	SPEAKER_02
Okay, so how are ABLE funds spent? Okay, so there's something called qualified disability expenses, QDEs. I find this is kind of like open. So again, we just like qualifying for the account, and you can spend it on a QDE, which either relates to an individual's disability or helps maintain, improve health, independence, and quality of life. That sounds like anything in the world. It sounds like everything, everything and anything. But again, let's not go there yet because we want to be cautious when we're doing any of these types of programs. We don't want to just say, oh, that's great. We can put all this money in here. We get all this tax -free growth, tax -free withdrawals, and then we can – at some point, there's a big windfall for the individual or the family. You've got to be a little more cautious. So yes, if it's likely, it's going to help the person live better. with their disability, it's going to qualify. It's pretty open. Let's go. I have a bunch of other. So here's the list. Now, this is my underline. It could be spent on basic living expenses, rent, utilities, food. So these are things that you might not be able to send out, let's say, a special needs trust. These are things, if it's coming from a different, these things that could affect other benefits, but not if it's coming from an able, able. So, again, this is one really positive thing about the ABLE account is that there's a lot of things you can spend on, including rent, utilities, and food, and it does not diminish other benefits. It could be cars, gas, public transportation, right here, health, medical care, again, therapies, mental health services, dedications, assistive technology, wheelchairs, again, home modification. So, again, this is a – I can just picture the situation, and we want to make sure that – We want to have some money in this individual's name. We can't have it in their name directly. This is a great opportunity. Actually, before I started working on this and getting ready for this, I had such high amounts of money, maybe $50 ,000 to $100 ,000, but something to really help enhance their life. Again, not affecting any benefits. More things you could do. Education, employment, tuition, job training, career support, legal. You could pay legal attorney fees. Financial planning fees, recreation, quality of life, travel, hobbies, fitness. It's really open to almost anything. But I wanted to get to this slide because there is still limits. As I said, it seems to be open to almost anything, but we've got to be careful not to abuse these accounts. There are limits. Well, there's no strict approved and non -approved expenses. Just put it that way. The question, and again, this is like practically speaking. How is this going to – who's going to test this? It's a purpose -based. Why are you spending – not what you're spending on it, but you're going to see people have a debit card and they can go out and spend it. But there's an expectation that there's going to be a reasonable connection to the disability. Again, we're talking about keeping some records on this. It's what you can't do. You can't use the funds for clearly unrelated. purposes. I don't really have any clearly unrelated purposes, but there are those out there. I think the bigger issue is that it may be pushed as an investment end run for tax purposes, and that's not a good idea. You could take advantage of the benefits of having this account, but again, it's not meant for general investment vehicle. And again, if you're taking distributions with no documentation or rationale, you could be subject to a problem. And I think I covered it. Yeah, caution. Yeah. So the money has to be used. What if you use money for non -qualified expense? Again, if it's just literally just spending without any consideration, you could have to – there could be the – if it gets under some sort of examination, which would probably be from the IRS, the earning portion of the withdrawal is going to be – taxed as income and whatever the beneficiary's rate is, which may not be so high, but still, there's some taxes. And there's a 10 % federal tax penalty, similar to taking a withdrawal from the IRA when you're not 59 and a half yet. And that's not something you want to do. And then if you've got – and there are state benefits also of creating ABLE accounts. Sometimes there are deductions, state -level income tax deductions or credits given. You might lose – they might need to be recaptured again. If you're taking advantage of what the government is offering and it turns out you were doing it too much, again, you could have a recapture. You'd have to pay back the benefits you got. So this is something, again, to think about. You check your state taxes, state -level taxation departments for this issue of recapture. So you want to be kind of clear about what you're spending on. Keep records and receipts, how money was spent. Will people be audited? I don't know. But my advice always is let's assume that you will be audited at some point. Somehow there will be a reconciliation. Have as many records as possible. I think one of the nice things about a debit card, they do offer a debit card, is that at least you don't have to write it down. You don't have to literally hold receipts. I don't think that's so practical. If you spend the money out of the account with a debit card, it'll just be right up on the account statements. And so it'd be pretty easy to keep the quote records. And this as relates to the finding the right ABLE account. So there are ABLE accounts around the country. What about, there is a, let's say, New Jersey, there's something called NJ ABLE, New Jersey, a New Jersey ABLE account, or there's other ones, Fidelity. or AbleNow. Fidelity and AbleNow, there's just tons of these things. Every state's going to have many multiples. Fidelity and AbleNow, for example, and there's just random examples, but Fidelity is being the largest investment platform in the country or the world. They tend to be very easy to work with, so I want to put them up there. I double -checked. They're kind of national, both these two, but they're really at every... Every ABLE account is associated with a state. And the state is Massachusetts for Fidelity.

00:34:18	SPEAKER_02
state is Massachusetts for Fidelity. ABLE now is Virginia. What if you want to use them? Well, the first part of the question is, you know, how are the funds invested, the fees? The sophistication level may go up if you go to Fidelity. Fidelity is going to offer you different investment options. But I saw that ABLE now and NJ ABLE also offer you. investment options. There are some fees. You'll probably get less fees at Fidelity. But yeah, you always want to double check these things. How easy is it to use? It seems that most are probably giving, at this point, give you a debit card, which is a great way to use it. So this is an important feature to look at if you're looking at these. How easy is it to access the funds and use the funds? If the state you're in – so let's say you're a New Jersey resident and you want one of these things. Well, you might get a – I don't know if there's now, but there had been some state income options from an INJ ABLE as you – pretty close to what you have at Fidelity. But again, you want to look into it.

00:35:20	SPEAKER_02
Okay. And from a planning perspective, what happens to the remainder of the ABLE account? All right. So there's, again, a right of recovery for Medicaid payments. after the account was established. So that's kind of just an interesting point. Let's say you've had some Medicaid, you've been covered with Medicaid, and now you decide, I'm now going to do ABLE accounts. So it's only the Medicaid payments after the account was established that they have a right to lean on. Now, what happens? So there are states with large Medicaid systems, meaning to say they can go ahead and do a collection. They're going to do what's called formal recovery. programs of state recovery uh i put new york new jersey california the biggest probably three um so depending on the state you're in there may or may not be some recovery by the state they may not go ahead and do it if it's a smaller state bigger states you probably should expect it so there's no there's no automatic or maximum recovery in the state so there may be some estate gift that may come out of this so after the person passes away and then there's you know there may be some Either the funds would go to the estate of the individual or maybe designated beneficiary on account. I'm pretty sure they all will offer a designated beneficiary. So that's probably a way to go when you do the planning. But again, part of the planning decisions you have to make is maybe there's a reason why you wouldn't put the maximum $500 ,000 into an ABLE account because maybe you want some assets to go to other family members or to not -for -profits that you like. Again, just a fact that it's important when we get to this topic. Okay, so the next biggest trust, maybe even bigger than ABLE accounts, is special needs trust. Again, there's nuances to how this works. So what is a special needs trust, S &T? I used to call them supplemental needs trust. I'm not sure why. I've actually had the most experience with these. I've had some experience with them going back over 20 years, 20, 25 years. And I actually just assumed, never knew that things would change. I just assumed that this was an option, the only option out there. So special needs trust, very, very, very important. So it allows assets to be used for the person to get assets in the trust without disqualifying them from SSI or Medicaid. Again, that's really our goal. If you don't have the SNT, you don't have the special needs trust. Again, there's different types of them. If there's an inheritance, we might lose SSI. If you lose SSI, you might lose Medicaid. Or, again, you might have a forced spend down and or disruption of care. Again, things we are trying to avoid. And with this assets in SNT and the special needs trust, the assets are protected. The benefits are preserved. And again, another quality of life enhancement. Similar to ABLE. ABLE is mainly about quality of life enhancements. S &T also. And I think it's good to keep those both in perspective because the ABLE account is a very simple, more simple solution for immediate daily needs. Once you get into a trust, it starts getting a little more complicated. And who's going to manage trust? Are there tax returns? other fiduciary responsibilities. So again, we're now moving up into a bigger territory in terms of higher amounts of money may go towards a special needs trust. Okay, the first one I want to talk about is a third -party special needs trust. Last year I had to work with somebody on a third -party special needs trust. It basically means that the funds are coming from a third party. They're not coming from the person who needs to maintain the coverage. It could be coming from a parent, a grandparent, somebody else. It's a very important tool. So the funds are coming from somebody else. It could be the parents. It could be grandparents. It could be other family members. And it's, again, not counted for SSI and Medicaid. Even though the individual is going to be the beneficiary to get payments, well, it's going to get help from this trust. We'll talk about how that works. There's no Medicaid payback. So that is a very big feature. So in terms of family wealth and family planning, the specialty trust is a very third -party specialty trust. Only a third -party specialty trust does not have a Medicaid payback. So the money will be there for supplemental needs for the individual.

00:40:03	SPEAKER_02
for the rest of their life, and then the funds would be distributed according to the terms of the trust after the passing of the individual. And so you could actually, again, you could leave it to individuals, you could leave it to not -for -profits. It's really a, it's very, very, of the different options, only a third -party special needs trust offers, again, no Medicaid payback. Now there's the first... party special needs trust. Let's just go through that. So that's where you're funding with your own assets. Again, you can't just slip it out of your name. So the first party special needs trust may be the option. You got one month. One month to get the funds into a special needs trust where you risk loss of benefits if you're getting a settlement or receiving an inheritance. But it preserves eligibility, which is one of our biggest goals. But unlike the third party, it does require Medicaid payback at death. And this is funds that would normally knock you out of benefits. Now you have an opportunity to take money out of your own name, put it into this trust. Again, it's supplemental slash special needs trust, but it does require Medicaid payback. Okay, so... Wait, hold on a second. I just skipped. Yeah. Okay, so I forgot the little buttons here. All right, so first -party special needs trust. Now, transfers are not penalized. Again, you've got to have a properly drafted trust. It's got to be administered. This is really where I put down the code requirements. Okay, there's some requirements here. I'm not going to go into those requirements. You're going to have to hire an attorney to draft up such a trust. I spoke to one of the... a company that basically manages this, that you have to have your own attorney, so they won't do that for you. There's got to be this Medicaid payback provision in the trust. And beneficiary under age 65. So obviously, if you're over age 75, you're not going to be able to get away with a first -party special needs trust. And that applies to what we're going to talk about in a second, something called pooled. And there's some advantages. Now, when I say first party trust, generally speaking, and both in the third party and the first party, the big issues on these trusts is who's going to manage them and how hard is it to manage these things? And I'm going to tell you something. I'm going to say, honestly, I've been a trust attorney. I've dealt with, I've drafted hundreds of trusts. I've been involved in managing over a billion dollars in trusts for one particular client. I have to tell you, managing a trust is not as simple. It is not simple. And as a lawyer, I took on trusteeship of a particular trust. I was helping a not -for -profit shut down its operations, and they couldn't find someone to take over a trustee. I said, no problem. I know exactly what I'm doing, and I'm regretting that decision. It is a big issue. When you get to pooled trusts, so what is this pooled specialty trust? These are really, really important. It's a type of first. Parties, special needs, which basically means there's got to be a payback. It could be money from your own name, but there's got to be a Medicaid payback. It's run by a not -for -profit organization. The funds are pulled for investment purposes. They're tracked in separate accounts. It's subaccounting. So it's really – the pool is really not – usually a pool means all the money is commingled. It is commingled for investment purposes. But, again, you have separate accounts. First, there's a Medicaid payback. And then here's the difference. There's a lot of advantages to special needs trusts because – the pooled special needs trusts because the pooled, they're going to offer – quite often they're going to offer social services. They're going to – a case manager plus professional management. You don't need to worry about who's a trustee. Is there tax returns? It's a field. There's an older guy. His entire career, he's in the plan giving department at – at UGA New York, United States Appeal New York. And he spent his whole career building a pooled special needs trust that linked the social services agencies that were supported, that are connected to UGA New York, something called FEGS, their social service agency. So they had all the caregiving and all the caseworkers to be involved with individuals for the rest of their life.

00:44:38	SPEAKER_02
and all the caseworkers to be involved with individuals for the rest of their life. And then the financial management was... done by UGA New York, which is a massive financial institution. But the funds have to stay at the not -for -profit. And they usually offer some sort of case manager. And this is a very big feature because what if at some point in the future, if this is for a child, who's going to be around to make sure that they're able to take advantage of the special needs trust? Okay, so I was very impressed with Plan NGA. I hadn't had to look out. reach out to them until preparing for this. What was really important, Plan NJ is just an example of a, this is for New Jersey residents only. They will not take out -of -state residents. But I'm sure there are similar things in different states. They have a pooled special needs trust as well as they're willing to serve as trustee of a first and or a third party trust. And you can have a combination of them because it depends on where the assets are coming from. And again, once you get over certain asset limits, I think $25 ,000 or more, they'll start giving you the caseworkers to be involved. So I was very, very impressed with what they do. There's another one. I didn't call them, but NYSARC, Trust Services again. They offer, again, multiple different types of trust depending on the circumstances. I put down here UGA New York, which I felt was a pioneer in this area. They're still around. Again, they partner with a social service agency. Again, so they provide, again, the financial headache management. They really take care of that for you, and they also provide caseworkers, case managers. Okay, so what can these SMTs pay for? Well, it is not. It's supplemental. I mean, that's why I used to call them a supplemental needs trust. I don't know where that term just stuck in my brain. Maybe it's because I read it in the legal – in the law. But now they're called special needs trust. But, again, it's about supplemental needs. They're designed to – again, they don't replace benefits. They're supplementing the person's life. So let's see. It could be therapies not covered. It could be caregivers, aids, travel. It could be education, technology, recreation. Direct payments, and this is different than the ABLE. So the ABLE account, you can make a direct payment for food or housing. But if it comes from an S &T, you could start reducing, let's say, SSI. So again, these are all factors you've got to consider. And maybe you'll do both. And that's one of my conclusions is you might do multiples. You might do a first -party type S &T. Maybe you'll do it at one of these places I mentioned. Let them manage it for you. And they may have a third party. And maybe you can do some pooled. And even ABLE account, you might do all of them. depending on your circumstances. So it's about enhancing life. It doesn't replace government support. Okay, so what the special needs trust cannot pay for. All right, so again, food and housing, again, you don't want to rent or groceries could reduce SSI. Cash is generally avoided, counts as income to the individual. So you're not giving them cash. You should not be giving them cash. The ABLE can do these things. The ABLE is done carefully, of course, with the QDEs. And if you do cash withdrawals, they must be spent within the calendar month if you have an ABLE account. So that's an interesting rule. Let's say you take it out today, February 27th. You've got to spend it by February 28th. So, again, taking cash out of these counts is probably not a good idea. But for the ABLE accounts, going back to that. You've got 30 days. You have a special needs trust. There is fiduciary liability. The fiduciary, the trustee, can be sued for mismanagement, self -dealing negligence. My main issue is these are all good issues. These are all big issues. Negligence or mismanagement is probably the more likely one if you have an individual. That's the biggest problem. The last situation I was dealing with, my friend's son was being asked to be a trustee of a special needs trust. I did not recommend he take that role. Even though he wants to be involved, I should follow up and see what they end up doing. I didn't think that was a wise move for a guy. Remove trustees, too, which is actually important if it's not going well. Being a lawyer, I will tell you the last thing you want to do is go to court.

00:49:12	SPEAKER_02
to court. But if you have to, you have to. So courts can remove a trustee, review, enforce action. Again, that would be like... Totally the last possible option you could think of. Okay, there are accounting requirements. Are there? That's the question. Well, if you're a trustee of a trust, you better keep records. You better keep track of distributions. You may be required to prove. So how do we choose the right special needs trustee? This is a very difficult question. Quite often we're talking about family members. I just feel like unless that family member is literally a fiduciary already in terms of managing trusts, I'm very hesitant to suggest that. I think professional trustees or corporate trustees or pool trust nonprofit. And I can mention already, some of these pool trust programs have different options. So if you don't want to pool, you want to do a third party, which gives you some estate. And this third party, again, individuals putting into it, it's a complex trust. Now, who pays the tax? The trust or the beneficiary. Complex trust, from an accounting perspective, it says complex. It is complex. And the hardest part is to find an accountant. That's what I was doing with my friend's son. I was, let's find an accountant who knows how to handle this. And that's one of the reasons why. If you can't find an accountant who knows how to deal with this, you really should be at a professional trust company. That's their responsibility. The first party, SNT, Special Needs Trust, and the pooled trust options, it's called a grantor trust, which essentially any tax will – these are not tax -free trusts. If there's earnings, there'll be a – it's called a K -1 – will pass on to the beneficiary. So you're the beneficiary. Who are the beneficiary of the account for a pooled trust? for a first -party trust, will pay taxes on their share of the trust. We'll pull this for the share.

00:51:18	SPEAKER_02
Okay, four spend downs. All right, so I want to wrap up. Let's see how we're doing with time. All right, so we're going to go to 1 .15. This is the last part. I'm going to go through this. We're going to see if we have time for a couple of questions. I promised already several of these places I've been in touch with. We're going to do some more programming on this. So if your questions aren't going for naught, we're not going to get to them. I see a lot of questions. We're not going to get to all of them for sure. But we're going to do some programming afters on different topics that people want to know. All right, so four spend downs. If that's the situation you're in, again, you can't give a gift to the family. That's not going to work out. And by the way, the five -year look back, even if you didn't realize you're going to have a disability situation, the five -year look back still applies. So gifts to the family are going to be. penalized in terms of Medicaid. But again, putting money into a proper SNC, it's got to be legally valid and it's got to meet the requirements. It's allowed. Again, transfer to an ABLE account. Again, there's limits, but again, is it allowed? Allowable spending. That's what I want to just end up today with. Okay, so Medicaid approved, spend down expenses. So just because there's a situation you've got to get into Medicaid doesn't mean you can't spend money. So number one, you can pay off debt. Credit cards, medical bills, personal loans. You can do mortgages. You can do home improvements, primary residence. And I remember this. My wife's grandfather, his wife, she did need to go to a nursing home. They did need to qualify for her. And I remember he was doing a lot of spending. Lawyers were guiding him on how to spend his money. He was buying a lot of shavers. That's all I remember. I don't know. He bought a lot of these. He was always working on electric shavers. Okay, roof repairs, bathroom renovations, again, accessibility modification is very important if there's a disability. You can spend it. It's not going to count against you for Medicaid spend down. Air conditioning, plumbing, electrical. You could buy or replace a vehicle. Again, one vehicle, as I said, you can't buy a lot of vehicles. You could buy one vehicle. You could buy an expensive vehicle. Could be an upgrade or could be replaced. Prepaid funeral burial, all this stuff, by the way, if you're involved in a spend -down, you probably need a lawyer to guide you through this process. I'm just giving you the basic facts, but again, a good idea. Every state's a little different. Again, you may need help there. Ear vocal burial contract, funeral plans, medical and care expenses. Again, these are things you can spend down without disqualifying Medicaid. Private caregivers, therapy, medical equipment, dental, vision care. Personal, property, home, household items, furniture, appliances, clothing, electronics. All right, it's not supposed to be excessive. So you can't just spend, you know, buy a Ferrari. I just don't think that's going to work out. That is excessive luxury. But it's got to have something reasonable. Again, is there a strict rule? No, but we got to stay within reason. Assistive technology, again, wheelchairs, hearing aids, modification, home modifications. Lawyer fees and professional fees, financial planning or Medicaid planning, education, training, support services. Again, you get job skills, skill development, support programs. Disqualifying transfer, again, subject to the five -year look back, whether you knew this was happening or not. So anything, if it's gifts of family, selling assets below market values, transferring money to others for safekeeping does not work. Again, these trigger Medicaid penalty periods. Okay, so I wanted to get to the last slide and see if Shelby can pick out a couple questions. Okay, the point, I just want to wrap up before we try to address any questions, even though we're really out of time. These are really big decisions. I think that what I present to you, if these apply to you, you can do multiples of these. It's not one or the other. The ABLE count may be for a certain limit, maybe up to $100 ,000. This will be sort of... daily living -type expenses, and then the SMT, the special needs trust, might be more bigger assets. The key is, obviously, we want to get either getting qualified or staying qualified, and that's really the name of the game in terms of planning. But these are good options. I would say multiple buckets may work out. If there's, again, large family inheritances coming in, you may want to put those in a third -party special needs trust because, again, it can continue in the family. The other question I always have is you want to lock up how much money you want to lock up. So the one case I was dealing with for my friend and his son was they want to put about a million dollars in a special needs trust. And I just said, well, maybe that's not the best idea. Because while it's in a special needs trust, yes, it's there to take care of his mom. But maybe half of that is special needs trust. Maybe half they can go skip the generation and get right to the grandchildren. Again, you want to think this through a little bit. And let us know the topics. We are going to have other presentations. And Shelby, I know it's already 104. So I'm here for another. Yes.

00:56:31	SPEAKER_00
Thank you, Jonathan. And thank you, everybody, for submitting your questions. There's a lot of really great commentary coming through on this chat Q &A section. The number one question I can answer, Jonathan, you don't have to, is will there be a presentation, recording, transcript, et cetera, shared? And the answer is yes. You'll receive an email shortly with the recording of this presentation today, and we'll also include a PDF of the slides. I'll throw a few of the questions out there, Jonathan. I think you answered some of them, but just to re -clarify. Are you able to get an ABLE account in a different state than where you reside?

00:57:14	SPEAKER_02
You are. You are. I tried addressing that, but yes, you are able to do that. But again, you want to measure, are there any state -level benefits that you want to take advantage of in your home state? You can do the Fidelity one, but that's a Massachusetts one. So if you live in New Jersey, you're not going to get a New Jersey. quote, benefits. So sometimes some tax, state -level tax benefits. But yeah, you can do any of them anywhere in the country. And I think one of the advantages of you can, the limits are go to where the location of the ABLE count is based out of. So Fidelity, Massachusetts probably has a high limit if you want, if they want to put large money in there. But yes, you can.

00:57:53	SPEAKER_00
Great. And then a slightly specific question, but, you know, folks ask this in a number of different iterations is, What happens when the individual or the beneficiary passes or the person who has created the accounts, either for ABLE or the special needs trust? What happens when they pass away?

00:58:11	SPEAKER_02
So, well, the ABLE account has a Medicaid payback. So it depends on the state how aggressive they are. Some states may be aggressive and they will go collect that. The only Medicaid payback it gets for. assets, it's for Medicaid spent after the creation of the account. So from the point of the creation account, Medicaid has a lien and they can collect on it. If they don't collect on it, it'll go to a beneficiary named for the account and or the estate. But I wouldn't count on that. So when you put money in an ABLE account, I would count on Medicaid, I don't want to call it a clawback, but Medicaid has a lien on it. For the S &T trusting, it depends on that, if it's a... third party, it's basically like a bequest. You can determine in the trust or it can go to your estate, go to whoever you want it if there's remaining funds. For the first party or the pool trust, that's going to have a Medicaid clawback and the pool trust have the most benefits because they're going to provide you a whole series of services, but that the funds generally stay in the pool itself. One of the not -for -profits I work for, we once got a check. from a remainder of a special needs trust. And at the time, I was 25 years ago, I was like, how do they do that? I thought the government takes it all. But again, if there's, there are sometimes remainders and our charity was named as a remainder beneficiary of that trust.

00:59:37	SPEAKER_00
Right. And then are you able to have both a special needs trust and an ABLE account?

00:59:42	SPEAKER_02
Not only are you able to, you should, it's a great idea. So I think that's one of the conclusions I wanted you to come away with is that. Boy, you maybe want to balance this, maybe a certain amount of money for that sort of daily living that you give some independence to the individual, then go ahead and utilize with a debit card for the ABLE account. Yet larger assets might go into a third -party trust, which is really more like an estate planning technique. But yeah, I would say it could be a combination. And one of the companies, the NJPlan, who I called, they literally, some people do all these things. First party, we've got a third party over there in the pool, and the able counselor will also work hand in hand.

01:00:25	SPEAKER_00
Great. A number of the other questions are, I think, a little bit more specific based on individual circumstance, Jonathan. So I'm going to go ahead and remind everybody you have Jonathan's email here up on the screen, folks. So if you have specific questions, we're happy to follow up and answer as needed. As Jonathan mentioned earlier before switching over into the Q &A, we'll be hosting some additional planned legacy planning webinars throughout the course of the calendar year. So please stay tuned for those invitations. Please submit any feedback that you have in the Q &A now as you please. But as a reminder, we will be sending out the recording. And Jonathan, if there's anything else you wanted to add, I'll hand it over to you before we sign off for the day.

01:01:14	SPEAKER_02
Yeah, so what I think we're going to do is I have to set it up, but I have a sort of calendar feature. We'll send an email out to everybody, and if they want to set up a half -hour consultation. I'm not going to be your attorney, and I may not be able to help you, but my goal is to be a resource to help you. Maybe we can help you figure out some things. So I'm open to that, but the best way to do it is through this calendar link. I just have to... I have right now like a 15 -minute one. I think 30 minutes is probably more likely. So you can set up the time. So if you call me on that number, the 908 number, it's a virtual number, and I'll get the message. It doesn't go directly to my phone, cell phone, or anything. And I'll reach out to you. Email is probably the best way to start reaching out to me. And then when we send out the calendar link, if you want to set up the time to have a conversation again. I'll see what I can do. And again, I think we'll also send out some more surveys in terms of like, hey, these are some potential programs based on all the feedback. I was not looking at the Q &A as I was going. I saw a lot of questions popping up, but I felt I couldn't address them.

01:02:19	SPEAKER_00
Yeah, no, we will handle it all after the fact. And thank you again, Jonathan. And thank you folks for joining here and asking some really great questions. We look forward to seeing you again soon and participating again with us. Be well and enjoy your weekends, everyone.

01:02:39	SPEAKER_01
Thank you, everybody.