For Lawyers

1.   Are nonprofit trusts given a special status under federal law to trust managers of special needs trusts? Yes.

When Congress confirmed the use of special needs trusts in 1993, the law stated that non-profit organizations may manage special needs trusts, and that non-profit trusts could retain funds in trust even after the death of the first beneficiary. Congress reconfirmed this in 1999.

2.  Does Vermont Law protect Disability Trusts from claims? Yes.

All trusts in Vermont are governed by the Vermont Trust Code, Title 14A V.S.A., which is Vermont’s version of the Uniform Trust Code. Creditor protection rules are primarily found in Chapter 5 – Creditor’s Claims; Spendthrift and Discretionary Trusts. he key protection appears in 14A V.S.A. § 505(a)(2), which states: Creditors of the settlor may reach an irrevocable trust except that this rule does not apply to an irrevocable “special needs trust” established for a disabled person under 42 U.S.C. § 1396p(d)(4) (the federal Medicaid statute). [law.justia.com], [legislatur...ermont.gov]. This exemption is what protects disability trusts in Vermont.

3.  Does Vermont have a specific law requiring the State to follow federal law about what special needs trusts can purchase for people with disabilities? ‍ ‍NO

Vermont does not have a statute equivalent to New Hampshire’s “Emily’s Law” that explicitly says the State must follow federal law on what a special needs trust (SNT) may purchase.

Instead, Vermont reaches the same result indirectly—by incorporating federal SSI and Medicaid law into its eligibility and administration rules. As a matter of law and practice, Vermont must follow federal standards, but there is no single Vermont statute that spells this out in the way New Hampshire’s law does.

RSA 167:4(V) requires the State to follow Federal law when administrating the medical assistance program. This law is called “Emily’s Law’ named after a young women with disabilities whose case led to the law.

4.  Is Enhanced Life Options a charitable organization? Yes.

Enhanced Life Options has been determined to be a tax-exempt public charity under IRC 501(c)(3).  

5.  Does the Social Security program allow Special Needs Trusts? Yes.

Since 1975 the Social Security Administration has had established rules allowing assets to be held in trust for a recipient of SSI if the disabled beneficiary cannot control the amount or the frequency of trust distributions and cannot revoke the trust. In 1999 Congress confirmed by statute the use of special needs trusts in the Social Security context.

6.  Does the Medicaid program allow Special Needs Trusts? Yes.

Special Needs Trusts have been used for many years in the Medicaid context, and in 1993 Congress confirmed the use of special needs trusts with respect to Medicaid. In 1996, 2004 and 2007, the New Hampshire Legislature confirmed the use of Special Needs Trusts by State law.

7.  Should I consider a Special Needs Trust if SSI and Medicaid are not involved? Yes.

A Special Needs Trust individually tailored to the needs of a person with disabilities can make a big difference for a person who is not receiving public benefits. Special Needs Trusts provide a protective management service and certain liability protections and can provide supplemental help in the event public benefits are needed in the future.

Lakes Region Main Office 55 Church Street Laconia, New Hampshire 03246 Phone: 603-524-4189 Fax: 603-524-5766 Email: elo@elonh.org

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