Federal law allows nonprofit pooled Special Needs Trust administrators like Special Needs Integrity to keep up to 100% of the Remainder of a Beneficiary’s sub-account upon his or her death. This law is found in the United States Code at 42 U.S.C. §1396p(d)(4)(C)(iv).
Many pooled Special Needs Trusts do, in fact, keep 100%. Most others keep at least 50% of the Remainder. The National Foundation for Special Needs Integrity will never retain any of your Sub-Account Remainder if you pass away*. This policy increases the chance of money passing on to your loved ones after Medicaid has been reimbursed in full (which is required by federal law no matter what type of private or pooled special needs trust you may use).
* In Oklahoma and Indiana, Beneficiaries may elect to leave a portion of the Remainder to Special Needs Integrity. However, leaving a Remainder to us is never required as a condition of using our services. If we do accept a Remainder, it is always at the election of the Beneficiary.”
Our decision not to retain the Remainder in your Sub-Account should you pass away accomplishes several goals:
1. First, although the federal law says that the nonprofit administrator can require you to leave as much of your trust that it wants after you die, that does not mean that the nonprofit organization should, in fact, do so.
Many nonprofit pooled trusts around the nation depend on their “Remainder shares” after a Beneficiary passes away to meet their operating expenses. We think that a MANDATORY Remainder requirement creates an enormous conflict of interests. This conflict is mitigated only if the Beneficiary is allowed to elect whether he or she will leave a Remainder to the trust. In Oklahoma and Indiana, the Beneficiary is allowed to make that election if he or she wishes. In all other states, we never retain a Remainder under any circumstances. We do not believe that a Fiduciary (the pooled trust organization who is the Trustee) that relies on the death of those it serves (you, the Beneficiary) can effectively carry out its mission with the complete selflessness and objectivity that each individual Beneficiary truly deserves from his or her Trustee.
Our ability to sustain ourselves has nothing to do with how fast or slow you use your trust Sub-Account and whether or not there is any money remaining in your Sub-Account when you pass away.
2. Finally, many pooled trusts have recently come under fire from their individual state’s government for their decision to keep some or all of the Beneficiary’s money after he or she has passed away. Some nonprofit organizations currently are engaged in heated battle with their individual state regarding whether or not they should be allowed to keep a deceased Beneficiary's money. For that reason, much of the energy that should be devoted to you — the Beneficiary — is devoted to legal battles over who gets to keep the Beneficiary’s money when he or she dies.
We would rather focus our time, energy and resources on you and your needs while you are alive — not on some war with the state over whether or not we get a cut of your money when you die. Our energy is spent on helping you find ways to use your money on YOU while you are alive — NOT on how we are going to use your money after you have passed away.
If you have any questions about Remainder Shares and Medicaid Payback, please give us a call.
