If you have any questions about The Disability Foundation, our services or our trusts, please don’t hesitate to ask us. The responses below to some of the frequently asked questions we receive will help provide answers or clarification in the event that you have a question outside of our office hours. Otherwise, please contact us via phone or email and let us help answer your specific questions one-on-one.
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What is The Disability Foundation?
The Disability Foundation is a nonprofit organization and a type I supporting organization of The Dayton Foundation. The Disability Foundation is a public charitable organization under Section 501(C)(3) and 509(a)(3) of the Internal Revenue Service Code of 1986, as amended. The mission of The Disability Foundation is to enhance the quality of life for people with disabilities by complementing public benefits through the prudent management of financial resources.
The Dayton Foundation established The Ohio Community Pooled Annuity Trust (OCPAT) in 1998. The Disability Foundation established the Ohio Community Pooled Flexible-Spending Trust in 2006, updating it in 2014. The Disability Foundation is the Distribution Trustee of both the OCPAT and the Flexible-Spending Trust. These Trusts are Medicaid Payback Disability Pooled Trusts, set up pursuant to (42 United States Code Section 1382c(a)(3)).
When should I consider an Ohio Community Pooled Trust as a planning option?
When an individual with disabilities receives or is set to receive, a lump sum such as from a personal injury settlement, a bequest from an estate or trust, or a back payment from Social Security, establishing a trust can protect the individual’s SSI/Medicaid disbursement.
- A parent/grandparent wishes to include a child or grandchild with a disability in their estate plan.
- An individual needs to distribute assets/resources in order to qualify for public benefits such as SSI and Medicaid.
Who qualifies as an individual with disabilities?
To benefit from the financial planning of a pooled trust, the beneficiary must be considered disabled within the Social Security Act’s definition of disability (42 United States Code Section 1382c(a)(3)). If you have questions about qualifying disabilities, please contact us.
Who can establish an account?
Only a Qualified Donor can establish a pooled trust to benefit someone with a disability. Qualified donors include individuals with disabilities (of any age), their parents or grandparents, legal guardians of estate or other family members. An account may also be established through a court order. A pooled trust may be established during the lifetime of a qualified donor, or be included in a donor’s estate plan to be established upon the death of the donor.
Powers Of Attorney
Although a Power of Attorney may be used to establish a trust, keep in mind that Ohio Revised Code 1337.42(A)(1) states that the power to create an inter vivos trust must be expressly granted in the document.
To be clear – To create a trust is considered a “hot power” and the principal must specifically state that the agent has the ability to “create trusts” see ORC 1337.42.
What type of accounts are available?
The Ohio Community Pooled Annuity Trust (OCPAT) is a first party trust and is an account that will provide a lifetime plan of payments, backed by our sponsoring organization, The Dayton Foundation. When a donor sets up an account in this trust, an annuity calculation is made and a monthly benefit determined. Each month that amount is credited to the individual’s spending account. A major advantage of this trust is that the monthly benefit is guaranteed for the life of the individual.
The Ohio Community Pooled Flexible-Spending Trust is a first party trust that provides an option for families who do not want the annuity limitation in the OCPAT. The only limit on the amount that can be spent is the amount in the individual’s account. This provides more flexibility if a major purchase is required.
The Third-Party Flexible Spending Pooled Trust is created with money provided by anyone other than the beneficiary. The beneficiary cannot create a Third-Party Trust, nor can any monies they have ever owned be deposited into the trust. Since the money never belongs to the beneficiary, upon their death, there is no Medicaid Payback and remaining money may be distributed according to the beneficiary’s wishes. Trusts of this type are typically established with funds given directly to the trust, an inheritance not yet distributed to the beneficiary or life insurance policy proceeds directed to the trust.
Why should someone choose the OCPAT?
The OCPAT is a life income plan for supplemental needs (as defined in Ohio Admin Code §5123:2-18-01) without causing loss of Medicaid and SSI benefits. A fixed amount will be available quarterly, from their individual spending account, to support lifetime supplemental needs or the fixed amount can be accumulated for a future activity. Assets of all trust participants are pooled for investment purposes, however, a separate account is maintained for each beneficiary.
How do you know payments for the OCPAT will continue once the asset is transferred to the Trust?
Each account agreement is a general obligation of The Dayton Foundation backed by the full assets of both The Dayton Foundation and The Disability Foundation.
What are the costs associated with the OCPAT?
There are no initial set-up fees to establish an account with The Disability Foundation and no annual maintenance fees are charged.
Why should someone choose the Flexible-Spending Trust?
The Flexible-Spending trusts provide an option for individuals and families who do not want the annuity limitation as offered in the OCPAT. The only limit on the amount that can be spent is the amount in the individual’s account. The Flexible-Spending Trusts can be intended for long-term use, however, they do require more financial advising by the individual and his/her Personal Representative.
What are the costs associated with the Flexible-Spending Trusts?
There is a one-time initial setup fee and an annual administration fee, both very affordable.
Why should I choose to work with The Disability Foundation?
The Disability Foundation has been working with families in the state of Ohio for more than 20 years, establishing over 800 successful trusts for people just like you. We have the experience and expertise to navigate the complex regulations related to government benefits and we enjoy helping families find financial solutions to benefit eligibility. Because we have a standard master trust (applied to every beneficiary without alteration and reviewed by the SSA), we can offer an affordable alternative and much of the time, we are able to establish trusts without the fees required by banks and other institutions.
Can the quarterly disbursements from any of the Trusts be used for purposes other than supplemental needs?
By law, the amounts may only be used for the supplemental needs of the individual. While the Trust cannot provide for an individual’s basic necessities, such as food, clothing or shelter, it can provide for the “extras” in life that greatly improve an individuals quality of life, including travel, hobbies or recreation. Under Ohio law, supplemental needs can include: items beyond necessary food and clothing, vacations, hobbies; other expenditures used to provide dignity, purpose, optimism and joy to the beneficiary; items that Medicaid and other government programs do not cover or have been denied payment include medical costs such as dental and vision or money to supplement rent payments.
Who determines the supplemental needs of the individual?
A personal representative selected by the family oversees the distributions to ensure that the individual’s best interests are being met. The personal representative will submit a request to The Disability Foundation. The Foundation’s Distribution Committee will monitor requests to ensure that an individual’s account is used for supplemental needs in order to protect the individual’s public benefits.
What happens if the beneficiary moves out of state?
If beneficiary has a Flexible Spending Trust, we require the trust be moved to the new state. There are pooled trusts in every state so we can help find a trust and move the funds. Although SSA rules are consistent in every state, not every state administers Medicaid the same because they may adopt a different state plan. Therefore, it will be important to contact and elder law attorney in the new state and become familiar with the Medicaid regulations of that state.
Can the Trust be used on housing expense while beneficiary is in nursing home?
We will pay housing expenses if the person is not on SSI and as long as no one else is living in the property (i.e. a child or grandchild).
If someone else is living in the property and the beneficiary is not because they are in the nursing home we will pay real estate taxes and homeowner’s insurance, but no utilities.
As long as a beneficiary is not on SSI, the payment of housing expenses should not impact benefits. As long as someone else lives in the house while the beneficiary is in a facility, utilities, etc. would not be paid by the trust because the beneficiary is not using the utilities so there is no benefit to the beneficiary.
What happens to the individual’s account upon death?
For the OCPAT, any accumulated funds remaining in the individual’s spending account after he or she dies must be paid to the State of Ohio to reimburse Medicaid for all expenditures made during the lifetime of the Beneficiary. The balance or “remainder” of the Charitable Gift Annuity will remain in the trust and help support programs and services for other individuals with disabilities.
For the Flexible-Spending Trust, 25% of any principal remainder will remain in the trust to help support grant programs and services for other individuals with disabilities and the remaining 75% can either go to designated beneficiaries (after repayment to Medicaid for expenditures made on behalf of the beneficiary) or remain in the trust to help other individuals with disabilities.
Medicaid Payback to Ohio Department of Medicaid
Upon death, we wait 45 days before we initiate the Medicaid Payback process to allow any bills to come in for expenses that were incurred prior to death. After the 45 days, we will request the initial Medicaid Liability and remainder funds from KeyBank.
We will then wait five months from date of death to request the final Medicaid claim because Medicaid providers have that long to bill Medicaid. If the initial Medicaid claim is larger than the money left in the sub-account, we will pay the claim in full because waiting until five months from date of death will not change that the Medicaid claim is more than the amount available to pay it from our Trust.
If we rely on a Medicaid claim that is sent to us too soon after the date of death, it may not be “final,” and the result is that we have underpaid Medicaid.
Only the Personal Representative can request post-death distributions. The Personal Representative should use our Distribution Request form and must submit all post-death distributions together in a single request. We cannot accept multiple request.
Funeral Expenses: We strongly recommend preneed funeral planning and submitting distribution requests before a Beneficiary’s death when possible. In certain circumstances, the trust may be able to pay for items after a Beneficiary’s death. However, this depends on the type of trust and may require approval from the State of Ohio and any other state in which the Beneficiary received Medicaid benefits. Funeral expenses that we are willing to consider can only include those funeral expenses that are within the confines of the funeral. We will not allow for travel for relatives, or hotels.
Final legal fees: Again, we will consider legal fees incurred in the final administration of the beneficiary’s estate. Again, as with funeral expenses, we will have to seek approval from the State of Ohio and any other state in which the Beneficiary received Medicaid benefits.
What are the tax consequences?
For the OCPAT, donations qualify as a charitable gift to The Dayton Foundation, if funds are contributed by a parent or grandparent. The amount of the charitable deduction varies, depending upon the age of the individual and the amount transferred to set up an account. A portion of disbursements are treated as “taxable income” to the fund recipient for income tax purposes. Each trust recipient receives a 1099 form for each taxable year. For the Flexible-Spending trust there is no charitable gift component to trust initiations. Disbursements are not treated as “taxable income.” Many trust recipients will receive a K-1 tax form for each taxable year, depending upon the size of the trust.
How do I get started?
To learn more about The Disability Foundation, contact Greg Darling, Executive Director, at (937) 225-9939 or at email@example.com.
What is an ABLE account?
We do not administer ABLE accounts at The Disability Foundation. However, many beneficiaries have found it useful to establish an ABLE account and periodically fund it from their Pooled trust. They can do so without loss of protection of the public benefits.
Advisor Specific FAQs
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Who qualifies as a trust recipient?
To be eligible for such protection, the beneficiary must be considered disabled within the Social Security Act’s definition of disability (42 United States Code Section 1382c(a)(3)). Each participant is unique. Examples: Down-Syndrome, CP, MR, Autism, Head trauma or Bipolar, Schizophrenia.
How it Works:
Individuals with disabilities and their families can deposit assets safely into the Trust to pay for the individuals’ supplemental needs.
In the case of the OCPAT, the assets are exchanged for a charitable gift annuity for the benefit of the disabled individual.
The Annuity Rates designated to the OCPAT are suggested by the Charitable Gift Annuity Rates assigned by the American Council on Gift Annuities. OCPAT trust recipients receive fixed, monthly annuity payments, based upon these suggested rates, paid into a Spending Account, held within the trust for distribution for supplemental need items. Distributions are available on a quarterly basis.
In the case of the 2014 Flexible-Spending Pooled Trust (which replaced the original Flexible-Spending Trust), assets are placed into a Pooled Trust for distribution, on an as needed basis, to acquire Supplemental Needs.
Assets of trust participants, for both of our trusts, are pooled for investment purposes, however, a separate account is maintain for each beneficiary
Is there a minimum to place within a Trust?
Minimum recommended contribution of $5,000 for the OCPAT.
No Minimum contribution for the Flexible-Spending Trust.
Individuals in the OCPAT (Annuity) will:
Have a Spending Account established within The Ohio Community Pooled Annuity Trust
A fixed amount will be available quarterly, from their individual spending account, to support lifetime supplemental needs or the fixed amount can be accumulated for a future activity
How do I know payments will continue once the asset is transferred to the Trust?
Each account agreement is a general obligation of The Dayton Foundation backed by the full assets of both The Dayton Foundation and The Disability Foundation.
What are the costs?
There are no set up fees associated with the Pooled Annuity Trust (OCPAT). A quarterly administrative fee, of 1.25%, is taken from the Pool of Accounts; however, this quarterly fee does not affect the monthly annuity payment as it is a fixed payment. There is a $5,000 recommended minimum investment for the initiation of an annuity through The Disability Foundation.
In regards to the Flexible-Spending Trust, there is an affordable one-time set up fee and an annual administrative fee charged to the individual trust. No minimum has been set for the establishment of a Flex.-Spending Trust.
Can the quarterly fixed amount be used for purposes other than supplemental needs?
No. By law, the amounts may only be used for items other than basic food and shelter as defined by Ohio Admin. Code §5123:2-18-01, i.e. funds may not be utilized to pay rent/mortgage, purchase groceries for the home, pay for a land phone-line or pay for medical costs covered by Medicaid.
While the Trust cannot provide for an individual’s basic necessities, such as food or shelter, it can provide for the “extras” in life that make life worth living, including travel, hobbies or recreation.
Under Ohio law, supplemental needs can include:
Items that Medicaid and other governmental programs do not cover or been denied payment (State budget: eliminate dental and vision services) and
Other expenditures used to provide dignity, purpose, optimism and joy to the beneficiary
What happens to the individuals account upon death?
For the OCPAT (Annuity), any accumulated funds remaining in the individual’s spending account after he or she dies must be paid to the State of Ohio. Any principle remainder ‘in trust’ remains in the trust and help support programs and services for other individuals with disabilities.
For the Flexible-Spending Trust, 25% of the trust remainder remains in the trust to help support programs and services for other individuals with disabilities.
For the remaining 75%, the donor has two (2) options:
Option #1: All funds may be designated to remain within the Trust to help support programs and services for other individuals with disabilities.
Option #2: All remainder funds, first, must be utilized to re-pay Medicaid, as reimbursement for benefits provided to the Individual with Disabilities. If funds remain after Medicaid is reimbursed in full, such funds may be designated to Beneficiaries.
Donations qualify as:
For the OCPAT, a charitable gift to The Dayton Foundation: if funds are contributed by a parent or grandparent. The amount of the charitable deduction varies, depending upon the age of the individual and the amount transferred to set up an account.
Also, each payment includes a portion which is treated as “taxable income” to the fund recipient for income tax purposes. There is no charitable gift component to the Flexible-Spending Trust
How the assets will be stewarded now and into the future?
At the Disability Foundation, we meet our stewardship obligations with layers of checks and balances in place:
Accounting: A spending account spreadsheet is maintained for every individual trust recipient. It shows all debits and credits, to each account, that occur through our office. In addition, we receive a monthly statement from KeyBank to show all investment activity, i.e. assessed fees, interest and distributions made from each individual account. Quarterly account statements, for each individual, are mailed to that trust recipient’s personal representative to show all quarterly activity in the account (from KeyBank).
Investment of Pooled Funds: KeyBank is the investment manager for the pool of trust funds. KeyBank must adhere to, and sign off to, the Investment Policy of The Dayton Foundation. In addition, the performance, of our investment managers, is reviewed quarterly by an independent auditor, the Fund Evaluation Group, out of Cincinnati.
Fiduciary Trustee: KeyBank is the Trustee for all the accounts. KeyBank is responsible for filing the K-1’s for each individual account and filing a tax return, on the pool as a whole, each year.
Auditing/Tax filing – as a type 1 supporting organization of The Dayton Foundation, The Disability Foundation is audited each year, by a local accounting firm, as one of the 3,000 plus funds managed by the foundation. In addition to the audit, as a 501c3, we are required to file a 990 on both The Disability Foundation and the Ohio Community Pooled Annuity Trust. The Trustee, KeyBank is responsible for all tax filings on the pool of funds for the Flexible-Spending Trust and The Disability Foundation for filing the Annuity and organization 990’s.
Longevity – the Disability Foundation is under the auspices of The Dayton Foundation, which was established in 1921. We have been around for 90+ years and we will be here for many decades to come.
How will the trust administrator ensure the trust requests are eligible for distribution?
Disability Foundation, Inc. as Distribution Trustee: The Disability Foundation is charged with ensuring that all distribution requests are reviewed and approved/denied based upon Ohio Admin. Code §5123:2-18- 01 , which restricts the use of trust distributions to ‘Supplemental Needs’.
All distribution requests are reviewed by the Executive Director and given final approval by the Disability Foundation Board of Trustees. Distribution requests must meet the definition of a Supplemental Need item or service, such as those defined by Ohio Admin. Code §5123:2-18- 01.
Proper record keeping of Supplemental Need purchases. Any funds released, from the trust, must have accounting provided for the services/good purchased.
How will you ensure the continuation of public benefits?
Communications – with Social Security and Job and Family Services. It is the responsibility of The Disability Foundation to communicate details, with authorization of the trust recipient, or his/her legal guardian, any financial information applicable to the continued eligibility for Medicaid and/or SSI benefits.
Annual Review – Disability Foundation provides a Trust Explanation packet for all annual reviews, where requested, to Social Security and DJFS.
What services do you provide?
Information sessions – individual or group
Communications with Public Benefit Agencies
Clerical – ensure timely reporting of balances, requests, communications, etc.
How are you different from other Pooled Trust Administrators?
We are the only pooled trust sponsored by a community foundation
We are the only organization to offer a Pooled Charitable Gift Annuity option.
We are among the least expensive, and most cost effective, administrator in Ohio.
We are a type 1 Supporting Organization of a Community Foundation, which means our greater goal is to enrich and enhance our region and state.
We work with clients of any age
We can setup your trust in just a few business days
Administering Pooled Trusts is not one of a myriad of services offered here at the Disability Foundation. Pooled Trusts is what we do.