Can I set up some type of trust account for my situation which I will explain below?
Ok here is the situation. A good friend of mine is paralyzed from the neck down due to a fall while fishing. We are doing lots of fundraisers for medical expenses. Here is the problem. The Church this family attends gave the wife $1,000 and the next day her and one of the sons had bought two $700 cell phones!! Needless to say there are quite a few folks that are upset. There have been several other incidents as well.
So the money that is coming in from sales of tshirts, donation jars and other fundraisers we would like to place somewhere so that we know the medical bills will be taken care of and used for the patients benefit and not for things that don't pertain to "his needs".
Please advise what we can do with this money. Thanks in advance
GOD BLESS
I am going to assume for the purposes of this answer that due to the nature and extent of his injuries, and the fact that there is fundraising actively going on, your friend is on Medicaid. If that is the case then it is possible to open an account in his name in a third-party pooled trust. If there is not a third-party pooled trust in NC, and if your friend is under age 65, then the funds would need to be given to him and he would need to assign them to a first-party pooled trust. The money would be controlled by the trustee and only spent on things Medicaid doesn't cover, referred to as his "special needs." The intent with either would be to improve his quality of life. The advantage of a pooled trust is that an attorney doesn't need to be hired to draft a stand along trust because the pooled trust has already been written. You can go to the website of the National Academy of Special Needs Planners at http://specialneedsanswers.com/pooled-trust for more information on pooled trusts in NC or you can go to the website of the National Academy of Elder Law Attorneys at www.naela.org to locate an elder law attorney who can help.
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You certainly need to talk with a trust attorney who can help you. Yes a trust is the vehicle which seems most appropriate but there are different kinds of trust and you want to be sure you don't disqualify your friend from receiving benefits he might be entitled to. The trust attorney will know what to do.
I'm sorry to hear about your friend's severe injury. Based on the facts you've provided, I believe you should look into establishing a trust for your friend's benefit. A properly drafted/administered trust can address most, if not all, of your stated concerns. This will definitely require the assistance of an attorney experienced in trusts.
Jason Robert Jones
Estate Planning Attorney in Chapel Hill, NCI agree and would add that if your friend was young enough (under 26) then they may qualify for an ABLE account. When you set up your meeting with an Estate Planner / Elder Law attorney be sure to ask if they are practiced in setting up Special/Supplemental Needs Trusts ("SNTs") or ABLE accounts. Mr. Davis answer above is exactly on point: if there come to exist needs-based government funds flowing towards your friend, he may well benefit from this type of advanced planning so that he does get disqualified for benefits. Good luck.
Kelly Scott Davis
Power of Attorney Lawyer in Cheyenne, WYThat is correct. An ABLE account should work provided the disabled friend is under age 26 and the total annual contributions from all sources does not exceed $14,000.