Question

Which of the following types of Special Needs Trust in Ohio do not require a “payback” to the State of Ohio at the death of the Special Needs Trust Beneficiary?

a) Supplemental Services Trust.

b) Pooled Trust.

c) Discretionary Special Needs Trust.

d) Special Needs Trust known as a (d)(4)(a) Trust?

Answer 1

Answer: (c) Discretionary Special Needs Trust

The most common special needs trust created by and with assets of a third party is known as a discretionary Special Needs Trust. With discretionary Special Needs trust, there is no requirement that funds be turned over to the state upon the death of the beneficiary.

Medicaid payback trust is the (d)(4)(A) trust which must contain assets of the individual but may also include assets of third parties. It also can only be used for supplemental services not covered by Medicaid or SSI and requires that upon the death of the individual the state must be repaid for Medicaid services provided from the remaining assets in the trust.

The other type of Medicaid payback trust is the pooled trust where a nonprofit organization serves as the trustee. For purposes of investment, the assets are pooled with others, but a separate account is maintained for each individual. There is no age restriction for this type of Medicaid payback trust. Once again, upon the death of the beneficiary, the state must be repaid for Medicaid services previously provided.