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Missouri

Name

Sarah Giboney
Smith Lewis, LLP
111 S. 9th, Suite 200
Columbia, MO 65201
573-443-3141

Email: sgiboney@smithlewis.com         

Education:  B.S.W., University of Missouri, 1994; J.D., University of Missouri School of Law, 2000.

Current Position:  Attorney, Smith Lewis, LLP.    

Certifications:  

Admitted to Practice Law:

                         Missouri, October 2000

                         Western District of Missouri, October 2000

                         Kansas, April 2001

           

Memberships:

            Missouri Bar Association

            Kansas Bar Association

 

Community Involvement:

            Trustee, Vice President, Legal Committee Member, Board of Trustees, Midwest Special Needs Trust

            Speaker, "Essentials of Durable Powers of Attorney and Living Wills", Advance Practice Nurses of the Ozarks Annual Fall Conference, 2005

Articles:

            Co-Author, Ch. 34 "Will Drafting and Execution," Missouri Practice Methods of Practice Transaction Guide, Fourth Ed. (2001)

            Co-Drafter, Title 21: Missouri Family Trust, Missouri Code of State Regulations

 

Your State's Social Security Region: Kansas City

Your State's Federal Circuit: Eighth

General Questions:

1.  Does your State Have a Specific Special Needs Trust Statute or Discretionary Trust Statute?

Yes. Through enactment of §§ 402.199 – 402.220, RSMo., the Missouri legislature created the Missouri Family Trust Board of Trustees as a body corporate with the authority to administer a trust to supplement the care, support and treatment of individuals with disabilities. Although Missouri Family Trust (now known as the Midwest Special Needs Trust) is an instrumentality of the State of Missouri, it is established as a 501(c)(3) non-profit entity and operates independently of state government.  Individual trust accounts that may be established within the Trust include third-party trusts, which are most often set up by parents for the long-term care of a child with a disability. In addition, certain so-called "Medicaid eligible" first party trusts and pooled trusts under federal law, 42 U.S.C. 1396p(d)(4)(A) and (C), may be established.

Trust may be established for individuals with disabilities who are residents of Missouri, Kansas, Oklahoma, Arkansas, Tennessee, Kentucky, Illinois, Iowa and Nebraska.  By statute, Missouri state agencies must disregard Midwest Special Needs Trust accounts as a resource when determining the eligibility for assistance of an individual who is a trust account beneficiary.   The Board makes efforts to comply with special needs trusts laws and regulations in the surrounding states, as well.

The Board also has established a separate fund within the Trust known as the Charitable Trust to provide charitable assistance for the benefit of indigent individuals with disabilities.

2.  Are there State-Specific:

Resources:  No.

Administrative rules:

Administrative rules pertaining to the Midwest Special Needs Trust are found at Title 21, Missouri Code of State Regulations (“CSR”) Division 10, Chapters 1-4.

Manuals/Standardized Forms:

Standardized forms are provided by the Midwest Special Needs Trust to establish an account for a beneficiary, including Trust Terms and Conditions and a Trust Agreement.  These forms and other information regarding the Midwest Special Needs Trust may be accessed via the web at www.midwestspecialneedstrust.org.

The reporter is unaware of any widely disseminated or standard Missouri forms for private special needs trusts.

Important Case Holdings:

Tidrow v. Director, Missouri State Dept. of Social Services, 688 S.W.2d 9 (Mo. App. E.D. 1985).

In re Missouri Division of Family Services v. Wilson, 849 S.W.2d 104 (Mo. App. W.D. 1993).

Masterson v. Dept. of Social Services, 969 S.W.2d 746 (Mo. banc 1998).

Pronouncements:  Unknown

Fiats:  Unknown       

Interpretations/Unusual interpretations of the law:

Recent enactment of the Uniform Trust Code by the Missouri legislature has generated significant commentary among estate planners on whether the protections granted to special needs trusts under prior statutory and common law have been eroded.  The concerns are centered on issues including who may be considered a creditor that may reach the assets of a spendthrift trust, and whether beneficiaries of "discretionary trusts" now have greater rights to compel distributions, thereby making the trust assets available to the beneficiary.  There have been no reported test cases, to date.

3.  Does the State run a tab?I.e., does the State track the cost of services to the beneficiary and present a bill if the individual inherits funds or otherwise acquires funds?

The State of Missouri Department of Social Services, Division of Medical Services (DMS), which administers Medicaid, tracks the cost of medical assistance provided to a beneficiary.  Pursuant to §208.215.3 RSMo., the cost of such assistance constitutes a lien against the estate of the beneficiary which includes first-party special needs trusts, i.e., a trust established with the beneficiary’s own funds. DMS seeks to satisfy such claims at the beneficiary’s death (and in limited circumstances, during life).” However, third-party special needs trusts are not subject to state pay back.

4.  Does the State have specific statutes or regulations on County medical services and reimbursement of costs?

No.

5.  Have You Seen Creative Uses of Charitable Remainder Trusts and SNT Receptacle Trusts?

No.

6.  Do you have a pooled trust in your state?

Yes. RSMo 402.215.2(11) permits pooled trust accounts to be established with the Midwest Special Needs Trust, in accordance with 42 U.S.C. Section 1396p(d)(4)(C).

Social Security Rules:

1.  When a third party (such as a parent or other individual) funds a trust for another person (the “beneficiary”) with the third party’s funds, what special rules does your SSA region have on:

Distribution terms: 

No region-specific SSA regulations.

Accounting/Reports/Notices:

No region-specific SSA regulations.

Housing:

No region-specific SSA regulations.

Remainder Beneficiaries:

No region-specific SSA regulations.   Federal SSA regulations do not require state payback on third party trusts. Remainder beneficiaries are named by the grantor.

2.  When an individual funds a trust with his or her own funds, using the authority provided under 42 U.S.C 1396p(d)(4)(A), what special rules does your SSA region have on:

Distribution terms:

No region-specific SSA regulations.

Accounting/Reports/Notices:

No region-specific SSA regulations.

Housing:

No region-specific SSA regulations.

Remainder Beneficiaries:

No region specific SSA regulations. Federal SSA regulations require state payback for first-party trusts. After the state has recovered the cost of medical assistance provided to the beneficiary, the remainder, if any, passes to those beneficiaries designated by the grantor.           

3.  Are you aware of specific issues regarding housing (purchase, maintenance, utilities, gifts of housing, rentals) that have raised questions or caused problems with your state agencies or SSA office?

Unknown.

4.  Are you aware of certain types of distributions that are likely to raise questions or cause problems with one of your state agencies or SSA office?

Not in particular.  However, SSA field office staff must be constantly re-educated about special needs trusts generally, to assure a clear understanding that (as special needs trusts are typically drafted) the trusts are not available resources in that beneficiaries have no right to distributions and that the language of the trust terms and conditions restrict distributions made to those which have no negative affect on SSI benefits.

Medicaid Rules:                       

1.  When a third party (such as a parent or other individual) funds a trust for another person (the “beneficiary”) with the third party’s funds, what Medicaid related considerations are involved?

 

Distribution terms:

As to Midwest Special Needs Trust accounts, by statute state agencies in Missouri are prohibited from counting trust assets as a resource in determining eligibility of Missouri residents for assistance.   This is true for third party trust accounts created with the Midwest Special Needs Trust. (§402.205.2 RSMo.).

Also, Missouri Department of Social Services, Family Support Division, which determines eligibility for Medicaid, has instructed its employees to exclude as income "…payments from the Missouri Family Trust Fund [now operating as Midwest Special Needs Trust] made on behalf of a beneficiary who is an applicant/recipient of MA [medical assistance]." (IM 0805.015.10).

As to private third party special needs trusts, the IM Manual directs that trusts generally are to be counted as resources when determining an applicant’s eligibility for assistance to the extent that the trusts are “actually available” to the applicant.  If trust funds are available in a lump sum distribution, then they are counted as a resource.  If trust funds are available in regular installments, they are counted as income.  Property of any type is considered available if the applicant "has the right to possess, use or sell it[.]"  (IM 1025.015.04; IM 1030.000.00; IM 1030.005.00; 13 CSR 40.-2.030).

Accounting/Reports/Notices:

      Changes in circumstance must be reported within 10 calendar days of the change.

Housing:

      Unknown.

Remainder Beneficiaries:

Third party trusts are not subject to state payback requirement. The remainder, if any, passes to those beneficiaries designated by the grantor.

2.  When an individual funds a trust with his or her own funds, using the authority provided under 42 U.S.C 1396p(d)(4)(A), what Medicaid related considerations are involved?

Distribution terms:

By statute state agencies in Missouri are prohibited from counting assets in a special needs trust administered by the Midwest Special Needs Trust as a resource in determining eligibility of Missouri residents for assistance. This applies to 42 U.S.C. 1396p(d)(4)(A) first party trusts.  (§402.205.2 RSMo.)

Also, Missouri Department of Social Services, Family Support Division, which determines eligibility for Medicaid, has instructed its employees to exclude as income "…payments from the Missouri Family Trust Fund [now operating as Midwest Special Needs Trust] made on behalf of a beneficiary who is an applicant/recipient of MA [medical assistance]." (IM 0805.015.10).

Accounting/Reports/Notices:

Changes in circumstance must be reported within 10 calendar days of the change.

Housing:

      Unknown.

Remainder Beneficiaries:

Medicaid regulations require state payback for first-party trusts. After the state has recovered the cost of medical assistance provided to the beneficiary, the remainder, if any, passes to those beneficiaries designated by the grantor.           

 

Department of Mental Health and Mental Retardation Rules:                               

1.  When a third party (such as a parent or other individual) funds a trust for another person (the “beneficiary”) with the third party’s funds, what requirements does the Department of Mental Health and Mental Retardation have for:

Distribution terms:

The reporter is not aware of any requirements specific to the Missouri Department of Mental Health.  Generally, state agencies in Missouri (which would include the Department of Mental Health) are prohibited from counting Midwest Special Needs Trust assets as a resource in determining eligibility of Missouri residents for assistance (§402.205.2 RSMo.).

Accounting/Reports/Notices:

None.

Remainder Beneficiaries:

None.

2.  Are third-party trusts liable for services provided by State Schools or State Hospitals?

No.

3.  How does the State Mental health, Mental retardation agency treat self-settled trusts?

The reporter is not aware of any special consideration given by the Missouri Department of Mental Health to self-settled or other special needs trusts. 

Generally, state agencies in Missouri (which would include the Department of Mental Health) are prohibited from counting Midwest Special Needs Trust assets as a resource in determining eligibility of Missouri residents for assistance (§402.205.2 RSMo.).


State Reporters are not sponsored nor endorsed by NAMI, but have volunteered to provide information. Many of the State Reporters are members of the National Academy of Elder Law Attorneys (NAELA) and the American Bar Association. Several are members of ACTEC (the American College of Trust and Estate Counsel). Many have children and other family members with disabilities. Most have been selected by other attorneys involved with this project, because of their recognized long-term involvement with special needs trusts.

NAMI does not, however, certify all information provided here is accurate. Further, the State Reporters do not certify that information provided by others is accurate. As for the State-specific information, each State Reporter has agreed to provide reasonable updates of information that they believe to be accurate.

Also, there is no coverage here of federal laws, veterans administrations rules, Section 8 housing rules, special education, or special county rules.


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