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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Family Law
Satisfied Customers: 110425
Experience:  Experienced attorney: Family law, Estate Law, SS Law etc.
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Special needs trust fund beneficiary is named as a

Customer Question

Special needs trust fund beneficiary is named as a beneficiary of his Dad's work life insurance policy.Classic mistake, but how can the SNT beneficiary claim his funds without losing his benefits? Can he simply have a check deposited into his special needs trust so he won't lose his CA Medicaid benefits?
Submitted: 23 days ago.
Category: Family Law
Expert:  Law Educator, Esq. replied 23 days ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
This is a classic fatal mistake I am afraid. Unfortunately, if the named beneficiary of the policy is the SNT beneficiary, then it has to actually go to the beneficiary and yes it does hurt their government benefits and causes them to cease until the money is spent up. So they have to take the money and have to spend it down and then they would get their government benefits reinstated again. They can spend the money down for things like prepaid funeral arrangements, a car if the person can drive or has someone driving them around or any other needs of the SNT beneficiary directly.
Customer: replied 23 days ago.
The beneficiary lives in a secure parameter facility at the moment and doesn't drive. He is extremely sick. His trustee has not accepted the money or filed out his claim form yet. Is there a way the trustee can cash the check and immediately spend down benefits before they are lost so his benefits will not be interrupted? How will the state know about the benefit?
Customer: replied 23 days ago.
HI, Another expert said it can go directly into the beneficiary's special needs trust and easily avoid losing benefits. They said a court could have the $ put in the Trust's name. He also said the Conservator may be able to sign a waiver that would allow the payment. Can you help me understand the different opinions?
Expert:  Law Educator, Esq. replied 23 days ago.
Thank you for your reply.
Well, the judge cannot change the beneficiary designation on the bequest. The SNT is a separate entity, so what would need to happen is the money goes to the beneficiary and then to the SNT. Because it is an SNT, Medicaid would have to actually approve of the transfer of the benefits into the SNT.
I disagree that it is as simple as you say you were told by the other expert. The conservator cannot just sign a waiver, this is involving MEDICAID, the conservator cannot circumvent medicaid rules.
So with medicaid approval, the money can be placed in the SNT, but you do need to go through medicaid and get their approval then the court approval to send the money to the SNT.

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