CEA Special Needs Trust Planning 3

Question 1

When a Special Needs Trust beneficiary receives in-kind support and maintenance (ISM), what is the most likely consequence?

Accepted Answer

Reduction in SSI benefit payments

Answer

In-kind support and maintenance such as food and shelter provided by the trust can reduce the beneficiary's SSI payments by up to one-third.

Question 2

What is the term for the legal document that outlines the trustee's authority and provides guidance on how to administer an SNT for a specific beneficiary?

Accepted Answer

Letter of intent

Answer

A letter of intent is a non-binding document that provides the trustee with guidance about the beneficiary's needs, preferences, routines, and goals.

Question 3

Which federal statute governs Supplemental Security Income (SSI) resource and income rules that directly affect SNT planning?

Accepted Answer

Title XVI of the Social Security Act

Answer

SSI is governed by Title XVI of the Social Security Act, which sets the income and resource limits relevant to SNT planning.

Question 4

An SNT beneficiary who receives SSDI rather than SSI is primarily concerned with which public benefit when planning trust distributions?

Accepted Answer

Medicare coverage

Answer

SSDI recipients rely on Medicare rather than Medicaid, so trust planning must focus on protecting Medicare eligibility and coverage.

Question 5

Which scenario would cause a Special Needs Trust to be invalidated or disqualify the beneficiary from Medicaid?

Accepted Answer

The trust makes direct cash payments to the beneficiary

Answer

Direct cash payments to the beneficiary are counted as income for SSI/Medicaid purposes, potentially causing disqualification from means-tested benefits.

(CEA) Certified Estate Advisor Practice Test

(CEA) Certified Estate Advisor Practice Test

CEA Special Needs Trust Planning 3