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GLOSSARY

Beneficiary - For purposes of a supplemental needs trust, the person with a disability for whose benefit a trust or insurance policy has been established. The beneficiary must have a diagnosis of intellectual or other developmental disability for purposes of eligibility to the Unrestricted Fund.

Developmental Disabilities - A condition that causes a person to have an impaired ability to under- stand and appreciate the nature and consequences of decisions, which result in such person being incapable of managing himself or herself or his or her affairs and whose condition is permanent or likely to continue indefinitely. In New York State, a de- velopmental disability:

  • Is attributable to cerebral palsy, epilepsy, neurological impairment, autism or traumatic head injury.
  • Is attributable to any other condition closely related to intellectual or other developmental disabilities because such condition results in similar impairment of general intellectual functioning or adaptive behavior.
  • Is attributable to dyslexia resulting from a disability described above or from intellectual or other developmental disabilities.
  • Must originate before such person attains age 22, or via traumatic head injury.

Donor (or grantor or settlor) - The person who funds the trust.

Executor / Executrix - The person responsible for collecting, maintaining and distributing the assets of an estate in accordance with the terms of the will. A male is referred to as an executor and a female is referred to as an executrix.

Inter Vivos Trust - A trust established by a person that becomes effective during his or her lifetime.

Joinder Agreement - The legal document that is executed by the grantor to establish an account with certain pooled or community-type supplemental needs trusts.

Means Tested Benefits - Benefits provided by the government that are only available to individuals whose income and/or assets fall below a certain qualifying level which will vary from program to program. Examples include Supplemental Security Income (SSI) and Medicaid.

Medicaid - A jointly funded state and federal health insurance program which provides coverage for families and individuals with low income and limited resources.

Medicare - A federal health insurance program that provides coverage for people age 65 and older, people under 65 with certain qualifying disabilities, and people of all ages who suffer from End-Stage Renal Disease.

Medicare Set-Aside (MSA) - A financial agreement that allocates a portion of a workers' compensation or personal injury liability settlement to pay for future medical services related to the individual's injury which resulted in a settlement. These funds must be depleted before Medicare will pay for treatment related to the injury which resulted in the settlement.

Payback Trust - A trust permitted by federal law that enables a beneficiary with a disability, under age 65, to protect his or her own assets by transferring them to a supplemental needs trust and still qualify for governmental benefits, such as SSI or Medicaid. Upon the death of the beneficiary, the state has the right to be reimbursed for the amount of correctly paid Medicaid benefits on behalf of the beneficiary. Any remaining trust assets in excess of the payback amount may be distributed as designated where the trust is set up.

Pooled Trust - A pooled trust is a special type of supplemental needs trust that is established and managed by non profit associations. Separate sub-trust accounts for each beneficiary are maintained, but the funds are pooled for investment purposes.

Self-Settled Trust - A type of supplemental needs trust in which the beneficiary’s own assets are used to fund the trust. Typically the money used to fund the trust is received by a person with a disability as a result of a court order, inheritance, life insurance payout, a medical malpractice, or personal injury action. This type of trust is established for the benefit of an individual with disabilities and is funded by that person’s own assets. This is commonly referred to as a “payback,” “self-settled” or “OBRA Trust” having been authorized by the Omnibus Budget Reconciliation Act of 1993.

Social Security Law SECTION 1614(A)(3) [42 USC §1382C(A)(3)] - This is the section of federal law that essentially defines “disabled.” To summarize, a person is disabled under this law if, because of an anatomical, physiological or psychological abnormality that will last more than 12 months or will lead to eventual death, prevents that person from holding substantial gainful employment. It covers physical, intellectual, and developmental disabilities.

Supplemental Needs Trust (or Special Needs Trust or SNT) - A trust that provides funds to a fiduciary for the benefit of a person with a disability. The assets of a supplemental needs trust are not considered as “available assets or resources” for the purpose of determining whether a person shall be eligible to receive governmental benefits. An SNT may be funded by a third party, such as a parent, grandparent, friend or relative. This type of trust is commonly referred to as a “Third Party Trust.” An SNT may also be established using the funds of the beneficiary with a disability (see self-settled trust). SNT funds are intended to supplement, not replace, government benefits programs such as Medicaid and SSI. An SNT enhances the beneficiary’s quality of life through the purchase of additional support services, social and recreational opportunities, advocacy, guardianship and medical services and equipment that are not otherwise covered or adequately provided through state and federal benefit programs.

Testator / Testatrix - A person, man or woman, who has died leaving a valid will.

Testamentary Trust - A Trust established under a will.

Trust - A trust is a legal agreement whereby you give your money to another person or an entity, such as a bank, called a trustee. The trustee manages the funds for the benefit of a person called the beneficiary. A supplemental needs trust is a special type of trust that assists people with disabilities.

A supplemental needs trust is also a way to set aside funds to enhance the quality of life of an individual with special needs without risking that person's benefits under various government programs, such as Medicaid, Supplemental Security Income (SSI), and other government benefits. While these programs will cover many of the basics of daily life, a trust adds another layer of financial security.

NYSARC offers a full range of trust services to our clients. We can manage the administration of pooled trusts, as well as first- and third-party individual trusts. All qualify as supplemental needs trusts.

Trustee - A person or a legally established entity that has legal title to property, holds it in trust for the benefit of another and owes a fiduciary duty to the beneficiary to follow the terms of the trust and applicable state law. A breach of fiduciary responsibility would make the trustee liable to the beneficiaries for damage caused by the breach.

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