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A Settlement Which Needed To Be Protected By A Special Needs Trust (SNT)

If you have ever had a settlement which needed to be protected by a special needs trust (SNT) then you probably know that federal law requires the Medicaid lien to be repaid at the death of the beneficiary.  No one has a crystal ball to forecast the size of the Medicaid lien or, the value of the trust assets at the beneficiary’s demise.  Consequently, it is important for us to counsel the trustee (and the beneficiary’s family) about planning proactively.

Purchasing a home for the SNT beneficiary is one of the largest investments a SNT will ever make.  However, if the home is not titled properly it can be an expensive mistake.  If the home is titled in the name of the SNT there is the potential result that the home may need to be sold to satisfy the Medicaid lien. The unfortunate consequence is that a family will lose their home.

Recently, we were called by a corporate trustee to represent them in administering an existing SNT. We discovered that the home was titled in the name of the trust.  We immediately informed the Co-Trustees of the inherent danger.  The probate division for the beneficiary’s guardianship is being petitioned to obtain authorization to transfer the title to the guardianship. The result will be to maintain the constitutional protection of homestead as well as the ad valorem tax benefits and the exemption from the Medicaid lien.

The Co-Trustees and the beneficiary’s Father are relieved that we identified the issue and are correcting it. Our client’s well-being and their appreciation of our service is just one of many rewarding reasons why we do what we do!

Support your clients by consulting with our firm early in the planning process.