How long does it take to setup a self-settled special needs trust?

Okay, well... Just got a call from my uncle.

They had a meeting with the estate attorney today, which neither me or my mother were allowed in. I'm not sure what was discussed in the meeting, but she apparently advised them not to return the money.

So, guess it's probate from here. Waiting for my mom's lawyers advice. Not sure what impact this will have on my mother's health or benefits... I'm honestly half tempted to involve APS at this point.

That's good to hear about guardian. I figured I would need to live here for it, and have been trying to avoid such a scenario for that reason. Knowing her lawyer can do it opens up a lot of options. And yes, this firm, from all accounts, is probably the best one I could have hired for my problem. 

It's currently an unprobated/will estate. The window to initiate probate will end in little over a month. My intention is to file for probate for my mom if it gets 2 weeks out, or it becomes obvious they aren't going to actually fix this. (we'll see what excuse they come up with next week.. My money's on needing to talk to a tax attorney, lol... ) But I'm honestly not sure if my mom will let me - as her demeanor on the topic is generally negative.  

If that turns out to be the case I think my best option is to simply walk away. Whether any of my concerns come to a head I think it's still mostly a win-win. Since if medicaid gets involved they'll probably rule misappropriation and force them to return the money regardless, and if they don't then it means my mom's wellbeing and benefits are still intact, and she'll at least have about half of what she was supposed to get. 

I suppose ERU deeming it a voidable transfer would suck for my uncles, but nothing I can do about that if they wont listen...

The trust atty can be guardian, with you as kinda ad hock consultant to them. You know judges in my experience (3 executorship and lots of time sitting in small & big county probate courts waiting to deal with Auntie clusterF of an Estate multiple marriages and no probate done on the dead hubs), judges do not want to appoint a guardian that is not a resident of the state of the ward or even not a resident of their county. The want it so that you are definitely under their purview. So it may mean you need local atty to be guardian anyways. Just sayin’......

Did probate close? There’s probably an action that can be done to reopen it within a period of time. The current probate atty, competent & fair?

@igloo572 I'm really not sure on the limiting. I wouldn't come close to spending 10k, so I doubt that's the concern. I've asked the question a number of ways (it was part of my motivation for asking this very question, even) but haven't gotten an answer.

My best guess is that until the waiver/trust agreement is approved anything paid out of it considered unearned income. Which would reduce her SSI by 1:1.

As for the waiver: I'm not entirely sure that I understand how this part works, but based on what I've read on https://secure.ssa.gov/poms.nsf/lnx/0501120203 seems like the trust makes it such that her benefits only continue on the count of undue hardship. And it's this hardship waiver that triggers the evaluation of the trust.

But, that seems rather contrived and unnecessary. So maybe (hopefully) I'm misunderstanding, and there's simply a department that approves trusts. Either way, I know I have to wait for the green light before being able to get all of the stuff she needs taken care of.

On a separate note: I have new problems with my uncles appearing to backtrack on returning the disclaimed funds. First they came up with several justifications for keeping more than I had expected. But after I told them those numbers were acceptable they decided they want to talk to the estate attorney first. ...The longer this all has gone on the more I've come to suspect they have been purposely delaying things to make the 6 month probate period lapse. ...So, that's the possibility I'm researching now.

I really hope I'm wrong though. As it means they don't care about the potential for that transfer to make her ineligible for benefits. And it means a long, drawn out, expensive process to recover the money. While I know for sure she would win, (between the brain surgery and medications it would be easy to argue misappropriation - plus medicaid and ERU both have mechanisms to get the money back for themselves...) it's just not something she (or any of us) should have to go through. (plus, I'd have to get guardianship for most options, which would tie me to this blasted state, and likely result in the ruin of my marriage and career.)

Hmmm on limiting amount of $, there’s the 10k $ movement paperwork that all banks have requirements on. Perhaps it’s that?

The waiver, is that for Medicaid compliance?

I’d suggest you always write any checks out to a business, so instead of just Bob Smith, it’s Bob Smith Painting Services... Bob Smith Yard Maintenance. Should mom run out of $ and need to go into a NH and apply for Medicaid LTC having checks to businesses should lessen gifting issues for the lookback.

Also as your returning home and mom’s staying at the inheritance house, give a thought if it would be good to buy gift cards from Kroger, Target so that if need be & she cannot get out to shop, she can give the gift card to a neighbor, friend to shop for her. This way no $ cash here & $ there and tracking smallish receipts or IOUs.

Glad you were glad to get this done so quickly. Must be different in ur state. Nephews SN trust paperwork was drawn up by his lawyer. On the paperwork it tells me what I am allowed to spend on Nephew. I Can't spend on housing or food.

Just reporting back the answer:

Trust agreement was signed friday, and an EIN produced today. Which I was then able to take (along with a trust certification, detailing the trust) to a bank to create the trust account. And was then able to transfer money into it. (@igloo - it is NOT closed. Assets can be transferred into it until she 65, after which time it will close. And anyone can contribute...)

However, there is a waiver that we have to wait for approval on. Not sure how long that will take. (this firm has used this trust agreement hundreds of times, so they expect it will be fast, but who knows).

I've been told that I can use the trust prior to approval, but that I need to limit how much I spend. She didn't give a clear answer as to why, and I can't find anything online on the topic, but I imagine it's because SSI may see it as income. (Though, since she'll technically be withheld benefits due to having received the inheritance this month regardless, not sure why that would matter...) Regardless, going to follow the lawyer's advice.

Do I have to prove it if she's already been threw such determination, and found fully disabled? She's been on disability since 1990.

If so, how long does this round of court normally take?

She's got a short life expectancy. So if this is going to take too long I think maybe the best option is that she just disqualify herself and put the money in her account. Seems likely she'll be disqualified regardless.

FWIW, I was able to get a meeting with a new lawyer wednesday. The firm itself looks more than qualified for this, but I'm worried about the lawyer they gave me. Seems young and inexperienced... Hoping this kind of situation normally means she relies on advice from her colleagues?

Don't you hate that. But I have to say...a SNT will not take a day. It has to be filed with a court. You also have to prove her disability. Like I said before, a judge has to sign off on it. My nephew was living with my Mom with a annuity so I wasn't planning on getting SSD for him yet. Lawyer told me to file and deposit his SSD check into the trust. Which I have done.

Alright, ...welp... the estate attorney said she has an emergency and needs to reschedule the meeting. But doesn't have availability again until the 26th... So, currently trying to find another lawyer (CELA group who's some hours from here seems like my only good option, though) . Hopefully they can make sure this is done before yet another month has lapsed...

Ah. Your concerns over "keeping the house [...] benefits that were obtained incorrectly," and her being deemed ineligible, and "rendering judgement to repay ssi" all seemed like you were implying they might deem something here fraud - as (from my understanding) that's the only time those risks apply.

Is there some other rules that you're concerned about there? Some other scenario when they decide you're ineligible?

SSI allows people to inherit and own a home. It's an exempt resource. I know this for sure. (inheriting one counts as ISM for the month it was received, though) And SSI allows disabled recipients to put things like inheritances into a qualified SNT trust. Even provides a specific mechanism for exactly this scenario - 42 U.S.C. 1396p (d)(4)(A).

So, I'm really not sure where you're coming from with this "she's not allowed to get SSI if she isn't indigent" stuff. It makes me think you're talking from a moral/political perspective, and not legal one.

On which point, know that I believe I am doing the most ethical thing possible here - since the mental impacts of her brain cancer creates risks to her well being for the option of disqualifying and re-applying once she's broke again. Besides, part of the requirements for an SNT is that the remainder go to SSI when she dies.  So the option doesn't put the taxpayers out anymore than any other option, and potentially results in more being paid back.  

Also, understand that her wellbeing is the only reason I'm here.  I don't gain anything from her. I didn't create this mess.  Was against the disclaim, and played no role in it happening.   And let's be clear: that's the only action that's been performed which created risk.   No other actions have actually happened, just lots of research on how to fix the disclaim.   So, I'm slightly offended that you're saying that I'm putting my mother's wellbeing at risk, when preventing such risk is precisely what I'm doing here. 

Tomorrow I meet with the attorney again, and expect resolution.  If that doesn't happen I guess I'll go back to trying to find an attorney.  Worst case, I involve APS myself, and argue misappropriation.  But I don't want to put either my mother or uncles through that... 

If you think I need to do more tell me.  

Also, FWIW, I found the answer to my original question.

The "Special Needs Trust Fairness and Medicaid Improvement Act" means she can fund the trust directly, and avoids the prior scenario of seeding the trust then having a court approve her transferring funds into it (and avoids complications that often arise from people using POA to perform the transfer).

So, setting up the SNT should only take a day.

Never mentioned fraud. Government employees are not concerned that you made mistakes. If you don’t know the law you are expected to hire someone who does. The IRS still collects tax due that was unpaid even if it was a mistake and someone didn’t pay. Special needs trusts have strict rules. SSI has strict rules. Section 8 has strict rules. The fact that somebody was attempting to protect assets by having mother disclaim them means someone knew the rules and was trying to get around them. I simply noted the fact that monies may be due back or the IRA have to be spent down if it’s SSI not SSDI. SSI is living money for indigent, not person with access to house and $7000. Your lack of knowledge puts mom at risk of APS deciding that family around her is not able to help and guardian is needed. I’m just saying get the right lawyers and CPA to make sure all rules followed on YOUR watch.

@Guestshopadmin - just seeing your response. Guessing you wrote it while I wrote my prior response.

I'm not sure where you got the impression that the upgrades were intended for future ownership, but that's simply not the case. We're expecting the house to go to estate recovery, and know of no recourse to prevent that. (believe me, they've tried finding a _legal_ means of accomplishing it.)

The upgrades are intended to lower her expenses and accommodate her disability. Nothing planned raises the value of the home, prepares it for rent or sale, or otherwise benefits anyone other than my mother. Also, my understanding is that such expenses are not counted as shelter, as they aren't required for it.

As for fraud, it's concerning to me that it would even be mentioned here. And I'm hoping that you simply misunderstand the situation.

So, to clarify:
1. She didn't need to disclaim to retain or gain benefits (nor did she stand to gain any other resources for that matter.)
2. Everyone thought disclaiming carried no risks, and would simply prevent the house from having her name attached in the first place (which is how disclaims work otherwise), to avoiding ER taking it when she dies.  
3. no documents or reportings have been concealed or falsified,
4. their correcting the situation shows they had no intent to break laws,
5. we intend to follow attorney advice to self-report everything needed, to fully rectify this situation.
....

If anyone still thinks there's a concern, please let me know.  My entire goal with all of this is to rectify any part of this that could lead to such problems..... I would have let them continue what they were doing otherwise.

As far as I'm aware she only need to worry about a penalty period (caused by any of the previously mentioned questions), and (depending on when they decide the call "day 1" of this ordeal) repayment for up to 4 months.  Which we intend to pay.

I'll verify this all with the attorney to be sure.

She is 60. The estate lawyer previously confirmed that a self-settled trust is possible (but seemed turned off by the idea). Everything I've read about these trusts (including the legal section itself) has shown "individual under age 65 who is disabled" or similar. So I believe d4A is what's called for here. And I'm not sure if a 3rd party is even possible, since she has those insurance policies to claim and contribute.

I expect that all of the monies will be distributed/returned to her, and then she deposit all funds to the trust, and no further funds added. Basically like it would have worked had the disclaim not occured. With the trust being the same agreement (irrevocable, medicaid payback, no resource access, etc) as it would have been otherwise as well.

But, I'll find all of that out for sure monday.

On electronic signatures:
1. I'll need to be here to help my mother set up the trust (bringing the agreement to her, getting her comfortable signing it, hiring a notary, returning it to the lawyer, helping her to transfer the funds to the trust, etc.)
2. there are various things I need to get done ASAP. Preferably before I leave. But, if the trust will take a while and my hands are tied I'll go home and come back once the funds are available. (I want to be present for any of the larger/contractor related purchases, to document, make sure it's done right, and avoid them ripping her off.)

That said, I'm considering the option of having her keep some of the money and spending it down for those things. That way I don't have to wait for the trust. Can get critical items done and go home. ...But... I worry that she'll use that money in a way which compromises her eligibility/the trust. And that even if done right it could further complicate this already messy ordeal. So, not sure there. I plan to ask the attorney, but kind of doubt I'll exercise this option regardless of her input. (unless she can provide me a way to keep my mom out of the money...)

On the house vs section 8:
She's dropped her section 8 benefits, and is now living in the house. There's a long list of reasons for choosing this option over "selling and staying on section 8," but all that matters now is that it's done.

I haven't seen, or been told, any concerns about her keeping the house. The estate attorney even said there wouldn't be any issue with her moving in. ...Worst case that I'm aware of is payback of section 8 received since her father died - or the month she received the house, at minimum.

Unless there's a major benefit I don't intend on putting the house in the trust. The medicaid payback clause means the house would definitely be lost then, and I've been told that kansas ERU "usually" only goes after cases where a nursing home was involved.

And I agree on limiting how much is spent on the house (and just in general). Especially until it's confirmed that any potential penalties or risks with medicaid are mitigated. For now I'm only considering things to accommodate her disability and lower her living expenses. Cosmetics and everything else will have to wait.

As for correspondence - she notified her case worker of the change of address. Also, since section 8 covered her appt at the 1st of the month (prior to our learning she can move in) she still has access to her mailbox there (which we've been regularly checking). Nothing from SSI has came to either places yet... I tried doing mail forwarding online, but they wanted a debit or credit card of hers, which she currently lacks (they found out she was letting her caretaker use the card... I was able to open her a new account yesterday, so waiting on that debit card...) (dare I ask if there's anything else that can go wrong here???)

Guest - great catch on SSIs clawback ability. So clawback with no funds to pay means indefinite suspension from SSI/SSDI & therefore Medicaid? And it’s federal so any tax refunds or SSA payments withheld as well. Ditto for state taxes. That’s it, isn’t it. Horrors! Oh my that would get beyond complex....

So Guest, am I right that SNT cannot have property titled into the SNT?
It’s only liquid assets, right?
Any any future $ is income for month received- so must be reported for SSI status - and then only afterwards become asset that can go into the SNT?
My cousins was “closed” so no dealing with that, but I can see it being complicated if assets trickle in. 

Your estate attorney needs to be very experienced in disability and special needs trusts. You do understand that a special needs trust cannot be used to repair the house she lives in because that is a contribution to housing and is considered in the in-kind calculations? If you are upgrading the house with an eye to family member keeping it with some sort of exclusion, then why doesn't someone buy it from her and use the cash to fund the trust? That would get her out of the house and possibly make her eligible later for Section 8. Any benefits paid during this carryover period will be considered as being eligible for review, possibly clawback. Any money spent that was not returned is a GIFT. There is no way in heck that most state auditors will give your mother any sort of waiver of penalty or not seek a repayment of benefits. You can't put a house in a trust and keep it safe if it's determined that you did so seeking to keep federal benefits that were obtained incorrectly. You need to stay boots on the ground with Mom, or find a bulldog attorney with CPA that can help make sure that you are not further compromised with paperwork filing and your mother is not rendered INELIGIBLE for SSI going forward. SSDI is one thing and based on earnings: SSI can and often is clawed back by the federal government because it's based on your income and assets being reported correctly. As you may or may not know, your mother's SSI/SSDI etc is not judgment proof if it's a federal agency that decides to seek repayment.

Funding needs to be certified or cured. If all legal in order, I’d guess 30 days. You might be able to get 1/3 after 5 days, if your good standing with this bank, 

D4a..... so how old is she? I’m remembering d4a are for those under 55. Try to check on this. D4a could have different oversight & filing requirements than an snt for the over 55/65 or elderly.

I was a trustee on cousins SNT that was a d4a. He had polio in 1950’s, his folks did a snt for him. SNT $ was a 1 time funding and I’m remembering that it had to be “closed” funding, so couldn’t have income added.  His folks turned trusteeship over to his bro & myself like 20yrs ago. & once his daughter moved back in state I basically gave her my proxy. & snt finally defunded EOY. His issues were physical not cognitive so basically he self directed the SNT to use for extraordinary things that his work income could never pay for. Which is going to be way way different than an persons SNT where someone (you, other trustee, an atty) has to do everything and must be written for Medicaid compliance.

The defund had oodles of paperwork which the law firm did & they did an annual reporting as well.
** I’d suggest you find out what on a continuous basis reporting and filing needs to be done. And what those costs are likely to be. If you are a legal resident of another state, you flat may need local law firm to be the point person for SNT. So extra cost.
**After Monday meeting, why can’t law firm electronic signature or overnight paperwork to you? Do they have an atty in your city that can bridge paperwork, signing, notary stuff?? 
** for Monday meeting have snt set up at a bank that is in your city. & you go and get it all set up in mom’s city and have bank officer set up a contact in your city’s branch. 
** also find out if  “closed” funding. Your post reads that there’s gonna be multiple assets that’s the $ inheritance to start up the snt, then $ from eventual? property sale, the surprise 7k ira. If as income surface and can’t be simply deposited to the existing snt, it’s gonna be an issue. It may need to wait to become an asset. Ask clearly if the lag time from income to asset affects her SSI. 

Why are you planning to spending $ on new AC, solar panels, repairs etc on the property? Do I have this right.....she’s now inherited the property (so the possible clusterF on her declining an asset basically has dissolved) she but lives in Sec 8 housing? If she lives in Sec 8, I don’t see how Medicaid is going to allow home to be exempt in the first place, but if the atty has a way to do this, good for you all. I’d love it if you’d share what the atty does.

Or am I wrong and she now lives in the inheritance house? So no more sec 8 benefits. But she does not have enough monthly income to afford house?
This is it, correct? 
So your ok on paying all property costs..., your buying those solar panels if need be and without reimbursement? 
You need to clearly find out what the SNT allows $ to be spent on from atty and in writing with the federal / state codes cited. 

If house has a trust as owner of the house / asset, then the trust should be paying the costs of its assets.... the trust now pays trust costs (atty fees, property taxes, property insurance). So the house is going to placed into the SNT?, I don’t think this is allowed at all for a SNT for anyone on SSI.  OR house is going into separate Trust?, and has it’s own funds to pay house stuff? OR house in her name? 
I’d suggest that this be clearly discussed Monday & a plan is done. 

Personally I wouldn't spend a penny on the house other than absolutely needed repairs till you find out if there’s going to be issues or ineligiblity for her with Medicaid or SSI AND if it’s realistic for her to live in this house. If she gets suspended from Medicaid, she needs to private pay her health care costs, it’s going to be expen$ive. 

What address is all correspondence from the state, Medicaid, insurers going to? 
Most notices from the state, etc have strict and tight timeframes for response & your toast if not submitted on time. If mail going to her at the inherited house, can mom without any issues or delay get mail to you? If not, is there a beyond dependable neighbor or friend that will mail monitor every 2-3 days for this first critical 6-8 months? If so, you don’t need to be there for dealing with mail. Otherwise I’d say be there every 7-10 days. 

For my mom, in theory everything Medicaid was to send all correspondence to her at her home address (she continued to own her home but was in SNF) and to me as dpoa to my address in another state. A good 1/3 of state or Medicaid / Medicare vendor correspondence was not ever cc’d to me. So having someone dependable to check mail is important. 

If you could post an update next week, it would be great. We do all learn from each other. Or try to!

Hi @igloo572. Thanks for paying attention/keeping track. Trying to provide context for all of this has gotten so convoluted that I'm not even bothering anymore. And It's nice to not have to. 

Yes, we told the estate attorney everything that has happened. And after a couple of weeks of thrashing around various ideas my uncles decided they are going to return the disclaimed money to her. (which appears to remove the resource transfer concerns) 

We're meeting with the attorney again monday to figure out the best way to go about that, and set it up in a trust. (I assume d4a, but not sure).  There's no probate court involved, and her eligibility isn't currently under a courts scrutiny.  So, I would think we're talking "setup" being however long typical admin and funding requires. Hopefully there's no chance of something like JoAnn's experience.  (whether I should use the trust until all potential issues with penalties and disqualifications are worked out is another question... )  

The heart of my question here is really to determine when I can go home to see my wife and kids. I've been here 6 weeks already, and still have no clear end or break in sight. So, rough ideas on time periods?

--- Separately, to update on the rest of the story so far:

Seeing no option to spare the house, and knowing that she can't be on section 8 while owning a home, my mother went ahead and moved in. She told her case worker about the home, gave her the new address, and about the incoming inheritance/policies. The case worker told us that there will be some paperwork in the mail. (I assume this is the part where people lie and get in trouble, right?)

She still has the problem that SSI is not enough to cover the bills for this house. This is creating pressure for rapid access to the trust. I want to upgrade the a/c unit, install solar panels, take over internet and phone payment, etc. to lower her bills into a more manageable range. 

Her brother expressed that they've given up on the house. A massive mess created for no good reason. (and left to me to clean up ......)  So, unless I find a way to save it before her passing, it's likely going to the state. (My current focus is more about how to administer this trust, though... ) 

My remaining concerns:

- some of her disclaim has been spent/is not possible to return. 

I think this results penalty period, for the missing amount. I'm not clear how she's supposed to support herself during this time, as she'll have no income and I can't use the trust to cover her food and shelter. But, I can't see any way to fix it. So, I'm hoping the penalty period is unnoticed, waived or small .. Guess I'll just have to wait and see. 

- she's technically owned the home since the day her dad died, due to the transfer on death deed. 

This means the section 8 resources she received until now could be overpayment. I think "good cause"/"without fault" applies here, since we didn't even know about the ToD deed until about a month ago, much less that she needed to report it. 

- she has insurance policies which she hasn't claimed yet. 

From what little I've been able to find on this aspect, there shouldn't be a problem here. When she receives distributions is what matters, and she can transfer them into a d4a trust, just like any other asset.  However, I could see an argument that they are/were resources available to her. Meaning she's gone 4 months with excess, unreported resources, disqualifying her from benefits, and realizing overpayment issues. 

- I learned today there's a $7k IRA, which appears to have gone directly into her name, without any action on her part. 

I only found out because she happened to open a new checking account at the same bank the IRA was left in, and when I setup her online account I saw the IRA account there. She has paperwork to sign for it, in with her insurance papers, so I'm not sure if this might count as an available resource... Kind of seems like it.  

I'm not overly concerned about these last two. While seemingly the worst possible outcome (her being disqualified) it appears the simplest to resolve: if the transfers to the exempt trust are complete, perform an “expedited reinstatement” request. If not, appeal the disqualification, retaining benefits while the trust is handled (and likely many months after). She's unquestionably disabled/unable to work. And a big part of me doubt's they'll actually penalize or disqualify someone in her mess. But, that's maybe just wishful thinking.

 Questions? See anything I'm missing? Got wrong?

It took me two years to settle my nephews. Partly because his Psychiatrist in NC was mad because I had a Dr. here in NJ take over his meds once it was determined he was living here. My lawyer was able to explain that the Dr. was doing my nephew harm. Paperwork had to be gathered from Drs and school to show he had special needs. I was told in the beginning that it would take a year. In NJ you have to go before a judge. He asked my Nephew questions and then signed off. I was told that I was not to use the money towards food or housing. Thats what SSD is for. I am limited to how I can spend the money.

Gripp - have the issues (various posts last month) of Medicaid ineligiblity been clearly settled for the home & funds inherited that she declined? 

Is next weeks atty fully aware of the very involved backstory?

Do you know what it means for a SNT done to be Medicaid compliant?