Guidance for Professionals

Overview

Whether you are an attorney, financial planner or disability service provider, we are here to assist you with information to empower people and families in planning their future. We can meet with you and your client to review options and assist you in determining if the OSNT is right for your client’s needs. We work with legal, financial and support professionals to establish either beneficiary- or donor-funded pooled trust accounts. Get started here to assist others with future planning or immediate safeguards.

Pooled Trust Qualifications

The Arc Oregon is an Oregon 501(c)(3) non-profit corporation that operates a special needs pooled trust (Oregon Special Needs Trust) to benefit people with disabilities. 

The pooled trust meets federal and state law requirements that protect a trust beneficiary’s public benefits and enable funds in the trust account to supplement the trust beneficiary’s needs.  The pooled trust provides for the administration, investment and distribution of assets that are pooled for purposes of investment and management, but which are held in separate sub-accounts for the benefit of individuals with disabilities.

The pooled trust is irrevocable and to be used only for the sole benefit of the trust beneficiary. The OSNT program is open to all Oregonians experiencing a disability as defined by the Social Security Administration, regardless of the nature of that disability.

Caregiver comforting a woman

Tax Considerations

The Oregon Special Needs Trust is professionally administered by The Arc Oregon. The assets in the trust are professionally managed by the legal trustee, Key Bank National Association.  

Each self-settled trust sub-account is a grantor-type trust for the purposes of the U.S. Internal Revenue Service and for determining the beneficiary’s individual tax liability, if any.  The Arc Oregon and Key Bank will provide a 1041 Form to all trust beneficiaries.  Neither The Arc Oregon nor Key Bank is responsible for preparing IRS Form 1040 or its state equivalent.   

For each third-party trust sub-account, appropriate trust tax returns will be completed and filed by the trustee. Any taxes due will be paid directly from the sub-account. K-1’s will also be sent to third-party donors.

Enrollment

First-Party / Beneficiary-Funded

The first question to answer before beginning the enrollment process is that of competency. A competent individual with a disability may open and fund an account in the pooled trust without assistance from an attorney or court approval. Although the federal law authorizing the use of pooled trusts does empower a parent, grandparent or guardian to establish a sub-account, the person who is transferring first-party funds into the trust must have the legal authority to do so. If the beneficiary is not competent to understand and enter into a legally binding agreement, then a court order approving the establishment AND funding of the pooled trust sub-account is required. If an individual is deemed financially incapable pursuant to ORS 125.005(3), and has been assigned a conservator, a court order is still required because the State of Oregon does not extend authority to establish or fund an irrevocable trust to conservators. Below you will find some examples of standard language that has been used in the past when drafting a petition to the court.

Third-Party / Donor-Funded

If a sub-account is to be established as part of an Estate Planning process, there is no need for a separate Special Needs Trust document to be drafted. All sub-accounts are administered pursuant to the Master Trust Agreement. To establish a sub-account for immediate funding, start with the Enrollment Process page.  We encourage donors to establish an unfunded sub-account even if funding is not expected until the donor’s death. For more information on immediate versus future funding options, visit the Donor-Funded Trust page Below are a few examples of language to use for testamentary funding of a sub-account:

“If (BENEFICIARY NAME) is living at my death, then (DOLLAR AMOUNT OR PERCENTAGE) shall be paid to Key Bank National Association, as the trustee for the OREGON SPECIAL NEEDS TRUST, dated November 25, 2015, for the benefit of  (BENEFICIARY NAME), to be administered by The Arc of Oregon.”

If another family member, a grandparent for example, also wants to contribute to this account, the grandparent should use this same language in their legal document.

For a life insurance policy, you may list the pooled trust as the beneficiary using the following language:

Key Bank National Association, as the trustee for the OREGON SPECIAL NEEDS TRUST, dated November 25, 2015, for the benefit of  (BENEFICIARY NAME), to be administered by The Arc of Oregon.

Attorney Referral List

We often get requests for a list of attorneys by families and advocates that need to seek a court order to establish a trust sub-account. We also encourage families who are thinking about future planning to seek legal counsel.  Although we do not endorse or recommend any particular attorney or firm, we are looking to add attorneys to the referral list who are familiar with our program, with pooled trusts in general, with the court order process, with special needs planning, and with trust administration. If you are an attorney and would like to be added to our referral list, please contact the OSNT Program Director.

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