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EMPLOYMENT AND ESTATE AND FUTURE PLANNING

EMPLOYMENT AND ESTATE AND FUTURE PLANNING. David A. Zwyer, J.D. Community Fund Management Foundation (CFMF) (614) 309-7117 zwyer@cfmf.org www.cfmf.org. Goal of this Presentation. To provide you with information about:

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EMPLOYMENT AND ESTATE AND FUTURE PLANNING

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  1. EMPLOYMENT AND ESTATE AND FUTURE PLANNING David A. Zwyer, J.D. Community Fund Management Foundation (CFMF) (614) 309-7117 zwyer@cfmf.org www.cfmf.org

  2. Goal of this Presentation To provide you with information about: • How you can work and save money for your own benefit or for your own retirement • How to save lump sums of cash that you receive and spend it over time instead of all at once • How a family can set aside funds for person/child with a disability to continue to provide things that the family currently provides, after family is gone And still retain eligibility for Medicaid

  3. Community Fund Management Foundation (CFMF) Nonprofit organization for people with disabilities Offers alternative to attorney-drafted trust • Master Trust and a Pooled Trust • Easy to create with Joinder Agreement

  4. MISSION OF CFMF Use Trusts to: • Enhance quality of life of people with disabilities • Safeguard eligibility for government benefits • Assist people with disabilities to save for their own retirement

  5. Governmental Benefits(Not means-tested, no asset limits) • Social Security Disability Insurance (SSDI) -- based on someone’s work history -- amount paid is in proportion to amount put in • Medicare -- 2-year waiting period [Income from work can reduce or end SSDI]

  6. Government Benefits(Means-tested, asset limits) • Medicaid -- Normal limit of only $1,500 -- Limit w/Medicaid Buy-In $11,148 -- * Payer of last resort * -- Pays approx. 60% of state/county programs • Supplemental Security Income (SSI) -- Support for Aged, Blind and Disabled -- Pays maximum of $710 per month [Income also affects eligibility and may reduce or end SSI]

  7. Do not try to hide surplus funds! • Don’t move extra cash to someone else’s account, a separate account, under the mattress or in a shoe box • Looks like hiding funds and might be fraud Options limited to spending surplus (e.g., burial account), paying to Medicaid, or putting into Special Needs Trust

  8. Medicaid Buy-In • An exception to the normal $1,500 limit meant to encourage employment • To qualify, must have a disability, be employed and earning an income – no matter how small the amount • Will pay a premium out of your income (on a sliding scale) in order to retain Medicaid • See http://jfs.ohio.gov/OHP/mbiwd.stm or call 1-800-324-8680

  9. EXAMPLES A. Working, on the Medicaid Buy-In, and have saved the maximum allowable ($11,148) • Lost job, was on the Medicaid Buy-In, and will have to meet the new $1,500 limit soon C. Worked for many years and had a retirement program. Retire at age 65 and now the pension becomes an asset.

  10. Medicaid Eligibility (p. 2) Concerned whether assets are accessible (i.e., can be reached or turned into cash) • Examples of Assets: • back paymentsfromSocial Security • inheritances, bank accounts • IRAs,life insurancepolicies, annuities • (as owner or beneficiary) $1,500 ceiling

  11. Parents' Obligation of support ends at 18 Parent’s Estate Plan • Could simply disinherit the person with a disability in aWill and leave nothing to him/her – not a good option • Could establish a trust that pays for a job coach or other employment-related items of support

  12. Trusts Generally (p. 9) • Flexible legal documents • Not only for the wealthy

  13. POSSIBLE TRUST EXPENDITURES • Adaptive equipment and other items that might support you in your job that are not paid for by Medicaid or other governmental program. • Medical/dental/vision care/prescriptions or therapies not covered by Medicaid (e.g., from a dentist who does not accept Medicaid) • Respite care

  14. More Trust Expenditures • Fun items such as vacations, cable TV, cell phone, computer, internet service, hobbies, sporting events, entertainment, pets & pet care, magazine subscriptions, health club membership • Elective or experimental surgery • Transportation costs • Visit friends

  15. Selecting a Trustee • If there are a lot of funds in the trust, or if the beneficiary has a disability, the more skill and experience needed -- Bank good with $, but not re disability • A Professional Trustee has to be paid • Pooled Trusts have “built in” Trustee, and you or person you designate interacts with trust

  16. Trustee: Family or Nonprofit? Siblings or other relatives as Trustee • Limited Time • Limited Resources • Limited knowledge regarding Medicaid and SSI Non-profit Trustee of Pooled Trust – specialized knowledge and staff

  17. Someone Else Can Set Up Trust for You with their Assets Not going to talk about that here except to say that a Discretionary Trust is their best option -- CFMF Master Trust is a Discretionary Trust It is better that they create the trust and not give $ directly to you -- Although you could then create a trust, you will have to agree to pay Medicaid back when you die if there are $ left

  18. If Assets Belong to a Person with a Disability There are two (2) options: • Special Needs Trust / aka Regular Medicaid Payback Trust • Pooled Medicaid Payback Trust

  19. Special Needs Trust (p. 19)aka Regular Medicaid Payback Trust • SNT = Ohio terminology / also general term • Remainder to Medicaid 1st when Beneficiary dies • Can be created by parent, grandparent, guardian or a court (pending legislation adds individual) • For Beneficiary under 65 at time of creation

  20. Pooled Medicaid Payback Trust (p. 19) • Separate accounts, Funds pooled for investment • Can be created by same parties, and also by the individual • Remainder to Medicaid 1stOR remain in Pooled Trust • Provides Trustee

  21. CFMF Roll-In Trust A type of Pooled Medicaid Payback Trust Can deposit small, irregular amounts until account reaches activation level Best example of a trust you can create to save for your own retirement

  22. Signing Up With CFMF • Joinder and Trust Documents on website • Must have your own attorney assist you • Submit documents with payment/deposit • Should select Designated Advocate (can be the beneficiary with the disability)

  23. Requesting Payments from CFMF • Forms and instructions on website • Allow lead time, especially for big, unusual requests • Requests reviewed to maintain eligibility • Can request 6 months of payments for items

  24. Typical Estate Plan • Will • Trust • Advance Directives (Living Will and Durable Power of Attorney for Health Care)

  25. What To Do with a Windfall? Talking about inheritance, payment from life insurance or annuity, recovery in a lawsuit, lottery winnings, or back-payment from Social Security Consider clothing, furniture, irrevocable pre-paid burial plan, outstanding debts -- If money still left, consider a trust

  26. Costs of a Trust • Attorney fees (extremely important to have an attorney with experience with disability trusts) • Set-up Fees (pooled trust) • Annual Fees for Trustee (and pooled trust)

  27. Pending Federal Legislation ABLE (Achieving a Better Life Experience) Legislation would allow accounts to be established for people with disabilities • Similar to 529 Accounts for education • Also has a pay-back provision • Can be more freely used for necessities

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