Types of Trusts
Wispact offers two types of Special Needs Trusts: the Self-Funded Trust and the Third-Party Trust. These Special Needs Trusts will not be counted as an available asset, and disbursements from them will not be counted as income under the rules that apply to SSI and Medicaid.
All Wispact trusts have been approved by the Social Security Administration (who administers SSI benefits) and the Wisconsin State Department of Health Services (who administers Medicaid benefits) as meeting the requirements for Special Needs Trusts.
Wispact Self-Funded Trust
The Wispact Self-Funded Trust (sometimes called a Beneficiary Trust) is a Special Needs Trust authorized by Federal law 42 U.S.C. § 1396p(d)(4)(C).
The Beneficiary must be disabled under the Social Security definition, and distributions from the trust may only be for the sole benefit of Beneficiary. Distributions may be restricted based on the public assistance received.
The Self-Fund Trust may be created by a parent, grandparent, guardian, the court or by the disabled individual. The beneficiary can be older than 65 years old.
The Trust is funded with assets that belonged to the disabled person when it was created and often requires court orders to create the trust account or transfer funds to it. Sources of funds might include personal injury proceeds, divorce proceeds, the sale of a home or inheritance directly paid to the beneficiary.
For example, here is Sam, who is on SSI and MA. Sam wants to create a Self-Funded Special Needs Trust and purchase a computer. This is how Sam would go about the process:
Wispact Third-Party Trust
Wispact’s Third-Party Trust (sometimes called a Disabled Individual’s Trust) is Special Needs Trust authorized by Wisconsin law HFS § 103.06(7)(a)3.
Beneficiaries can be people of any age with a Social Security-defined disability. The disbursement of funds must be for the sole benefit of the disabled person but are generally not restricted.
The Third-Party Trust can be created by anyone but the Beneficiary (e.g., parents, grandparents, friends, guardians, courts, etc). The statute does not allow the disabled individual to create his or her own trust.
The Trust is funded from assets that are not/have not been assets of the disabled beneficiary. Typical funding is gifts from parents, other family members and friends. Sources of funds may also include inheritances through a testimonial trust.
For example, here is Jill, who is on SSI and MA. Jill wants to create a Third-Party Special Needs Trust and pay for dental care. This is how Jill would go about the process:
Would you like to establish a Wispact Special Needs Trust? Send us a request for more information: Contact Us Read more about the Steps to Establishing a Wispact Special Needs Trust Do you need to do a Request for Distribution? Start a request now.