Special Needs Trust Planning Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Special Needs Trust Planning flashcards as text
A grandparent wants to leave money to a grandchild with a developmental disability without jeopardizing government benefits. Which planning option is MOST appropriate?
Answer: Leave assets in a third-party Special Needs Trust
A third-party SNT allows the grandparent to leave assets that supplement the grandchild's government benefits without counting as the grandchild's own resources.
What happens if a Special Needs Trust distributes funds for food and housing expenses in excess of SSI's one-third reduction rule?
Answer: The SSI benefit may be reduced up to the presumed maximum value amount
SSI can be reduced by up to the Presumed Maximum Value (PMV) when in-kind support and maintenance is provided, which equals one-third of the FBR plus $20.
A beneficiary of a first-party SNT passes away with $150,000 remaining in the trust. The state Medicaid agency has a lien of $90,000. What happens to the remaining funds after the Medicaid payback?
Answer: The remaining $60,000 can be distributed to remainder beneficiaries named in the trust
After satisfying the Medicaid payback requirement, any remaining assets in a first-party SNT can be distributed to remainder beneficiaries named in the trust document.
Which of the following is a common mistake in SNT drafting that could jeopardize government benefits eligibility?
Answer: Giving the beneficiary the right to demand distributions at will
If the beneficiary has a legal right to demand distributions, the trust assets may be counted as available resources, disqualifying them from SSI and Medicaid.
Which professional credential is specifically associated with expertise in Special Needs Trust planning and disability financial planning?
Answer: Certified Special Needs Advisor (CSNA)
The Certified Special Needs Advisor (CSNA) designation indicates specialized training in financial planning for individuals with disabilities, including SNT planning.
Under the ABLE Act, what is the annual contribution limit (as of recent law) for an ABLE account, and how does it relate to the gift tax annual exclusion?
Answer: Equal to the annual gift tax exclusion amount
The ABLE account annual contribution limit is tied to the federal gift tax annual exclusion amount, which is currently $18,000 (2024), allowing contributions from any number of people up to this annual cap.
When a Special Needs Trust is created in a will, what major planning risk exists regarding the beneficiary receiving the inheritance before the trust is funded?
Answer: The probate process may result in assets passing directly to the beneficiary, disqualifying them from benefits
During the probate process, assets could inadvertently be distributed directly to the beneficiary, counting as their resources and causing disqualification from means-tested benefits before the testamentary trust is fully established.