Trust Setup And Costs

Summary

Special Needs Trusts (SNTs) and Irrevocable Trusts offer different benefits for Medicaid eligibility. SNTs protect assets for disabled beneficiaries without affecting benefits, while Irrevocable Trusts safeguard homes from Medicaid recovery. Setting up an SNT involves drafting fees ($1,500-$3,000) and attorney review ($200-$400/hour). Integrating an SNT into a revocable trust simplifies management, while a standalone SNT provides asset separation. Bank accounts and cars can be included in an SNT, ensuring funds are used for supplemental needs. A Transfer on Death (TOD) designation can streamline asset transfer without probate. Consult an attorney to ensure compliance with Colorado laws and address specific needs.

Full Conversation

"If/Then Scenarios for Protecting the Beneficiary and Descendants *. Special Needs Trust (SNT) - If the grantor places the home in a Special Needs Trust (SNT), - Then the assets in the trust are not counted as part of the beneficiary's estate and can be protected from Medicaid recovery. - Then the trust can specify remainder beneficiaries to inherit the assets after the primary beneficiary's death, according to the grantor's wishes. *. Irrevocable Trust - If the home is placed in an irrevocable trust, - Then the home is protected from being counted as an asset for Medicaid eligibility. - Then Medicaid cannot recover the home upon the death of the grantor, as it is not considered part of the estate. - Then the trust can specify how the assets should be passed down to descendants."
Both Special Needs Trusts (SNTs) and Irrevocable Trusts serve different purposes and have unique benefits. Here's a quick comparison:
- Special Needs Trust (SNT)
- Protects assets from being counted as part of the beneficiary's estate.
- Ensures Medicaid recovery is avoided.
- Specifies remainder beneficiaries.
- Irrevocable Trust
- Protects home from Medicaid eligibility and recovery.
- Provides control over asset distribution to descendants.
To determine which is easier and less costly to set up, could you share the primary goal you have in mind for the trust?
I’m wondering how an adult child who is listed as the sole beneficiary of the grantor’s home and who is also a currently disabled, on Colorado Medicaid and Colorado SNAP, can be maintain their eligibility for Medicaid and SNAP if they inherit the home. The adult child has lived in the home with the grantor for 25 years. I thought that if the house is placed in a irrevocable trust upon it being transferred to the beneficiary, it is protected from being counted toward income qualification and if placed in an irrevocable trust it is not protected from counting as income for Medicaid eligibility. Do you have any suggestions of how this can be accomplished?
To ensure the adult child's eligibility for Medicaid and SNAP while inheriting the home, consider setting up a Special Needs Trust (SNT). Here’s why:
- Special Needs Trust (SNT):
- Protects assets from being counted as part of the beneficiary's estate for Medicaid eligibility.
- Ensures the home is not considered an asset, maintaining Medicaid and SNAP eligibility.
- Avoids Medicaid recovery post-beneficiary's death.
Would you like more detailed information on setting up an SNT?
yes please and typical costs to set one up because I don't have much disposable income.
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Setting up a Special Needs Trust (SNT) can be beneficial for your situation. Here is a brief overview of the typical costs and process:
- Drafting Fees: $*,* - $*,* for basic SNTs
- Attorney Review: Hourly rates typically range from $* - $*
Would you like more detailed guidance on the steps to set up an SNT in Colorado?
yes , please
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To set up a Special Needs Trust (SNT) in Colorado, here are the steps:
- Consult an Attorney: Find an attorney experienced in SNTs.
- Draft the Trust Document: The attorney will draft the trust, ensuring it meets legal requirements.
- Review and Finalize: Review the document carefully and finalize it with the attorney's help.
- Fund the Trust: Transfer the home and any other assets into the trust.
Would you like information on how to find an attorney or any other specific details?
Is there a Colorado SNT template I can fill out so that there are less attorney billable hours. Like getting all the ingrdients measured out for the chef making the cake?
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Currently, there isn't a standard state-provided Colorado SNT template available. However, here's what you can do to minimize attorney fees:
- Research and gather sample SNT templates online.
- Write down all the specific details and requirements you want in your trust.
- Present this information to your attorney to streamline the drafting process.
This preparation can help reduce billable hours and overall costs. Would you like more information on where to find sample templates?
yes please
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You can find sample SNT templates online at websites like LegalZoom, Nolo, and specific legal forums. These resources offer guidance and examples which you can adapt to your situation before presenting them to your attorney.
great! How about Rocket Lawyer?
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Rocket Lawyer is another good option for finding legal templates, including for Special Needs Trusts (SNTs). They offer a variety of legal documents that you can customize to fit your needs. Here are some steps you can follow:
- Visit Rocket Lawyer’s website and search for Special Needs Trust templates.
- Customize the template to your specific requirements.
- Present the customized template to your attorney for review to minimize additional billable hours.
Would you like more details on using Rocket Lawyer or any specific questions about it?
I understand that Rocket lawyer gives members unlimted access to thier contracted lawyers. Do you know if they have state planning lawyers?
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Rocket Lawyer does offer access to estate planning lawyers for their members. You can use their platform to find and consult with lawyers who specialize in estate planning, including setting up trusts.
Would you like information on how to contact Rocket Lawyer, or do you have other questions regarding estate planning?
Before I sign up Rocket Lawyer, do you know if genieai.co is only a legal template website or does it include attorney services like Roket lawyer?
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Genieai.co primarily offers legal templates and AI-driven document creation, but it does not include attorney services like Rocket Lawyer does. Rocket Lawyer provides access to legal advice and attorney consultations as part of their membership.
Would you like to know more about Rocket Lawyer's services or have another question regarding estate planning?
Yes. what are critical factors and items I need to include in my SNT Trust?
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To set up a Special Needs Trust (SNT) in Colorado, consider including the following critical factors and items:
- Trustee: Designate a trustee who will manage the trust.
- Beneficiary: Clearly identify the beneficiary.
- Purpose: State the purpose of the trust.
- Assets: List the assets to be included in the trust.
- Distribution Rules: Specify how and when distributions will be made.
- Successor Trustee: Appoint a successor trustee in case the original trustee cannot serve.
Do you have any additional questions or specific concerns about setting up your SNT?
Yes. Please draft an example of an SNT trust with these fictitious people. Grantor is Betty. Betty Special needs beneficiary of house and funds to pay house mortgage of house is Susan. Susan’s oldest adult son, John, is SNT trustee. Betty requests house be passed to Susan John and Timothy (John’s brother) when Susan dies. The SNT is to protect Susan’s continuing Medicaid coverage. With Susan’s consent, John can sell thehouse and place it in another SNT for Susan’s housing needs.
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Sure, here's an example of a Special Needs Trust (SNT) based on the information you provided:
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Special Needs Trust Agreement
This Trust Agreement, made this ___ day of [Month], [Year], by and between Betty (hereinafter referred to as the “Grantor”) and John, as Trustee (hereinafter referred to as the “Trustee”), establishes the following Special Needs Trust (hereinafter referred to as the “Trust”) for the benefit of Susan (hereinafter referred to as the “Beneficiary”).
*. Trust Purpose: The primary purpose of this Trust is to provide for the supplemental needs of Susan, while ensuring her continued eligibility for Medicaid and other public benefits programs.
*. Trustee: John is appointed as the Trustee of this Trust. John shall manage, invest, and distribute the Trust assets in accordance with this Trust Agreement.
*. Beneficiary: The Beneficiary of this Trust is Susan.
*. Trust Assets: The initial Trust assets include:
- The residence located at [Address] (hereinafter referred to as the “House”).
- Funds to pay the mortgage on the House.
*. Distributions: The Trustee shall use the Trust assets to provide for the supplemental needs of the Beneficiary that are not covered by public benefits programs. Distributions may include, but are not limited to, housing, medical care, personal care items, education, and transportation.
*. Protection of Public Benefits: The Trust is intended to supplement, and not supplant, any public benefits that the Beneficiary may receive. The Trustee shall ensure that distributions are made in a manner that does not disqualify the Beneficiary from receiving such benefits.
*. Sale of the House: With the consent of the Beneficiary, the Trustee may sell the House and use the proceeds to purchase another residence for the Beneficiary or place the proceeds in another Special Needs Trust for the Beneficiary’s housing needs.
*. Remainder Beneficiaries: Upon the death of the Beneficiary, the Trust assets shall be distributed as follows:
- To Susan's children, John and Timothy, in equal shares.
*. Successor Trustee: In the event that John is unable or unwilling to serve as Trustee, [Name of Successor Trustee] is appointed as the Successor Trustee.
*. Governing Law: This Trust shall be governed by and construed in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the Grantor and the Trustee have executed this Trust Agreement as of the day and year first above written.
[Grantor Signature]
Betty, Grantor
[Trustee Signature]
John, Trustee
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This is a simplified example. It's important to review it with an attorney to ensure it meets all legal requirements and addresses the specific needs of your situation.
oops
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It seems like you are looking for ways to minimize costs when setting up a Special Needs Trust (SNT) for continued Medicaid eligibility in Colorado.
Would you like more information on affordable legal resources or have any other specific questions about setting up the SNT?
oops. I ggofed up. Yes. Please draft an example of an SNT trust with these fictitious people. Grantor is Betty. Susan is the special needs beneficiary of house and funds to pay house mortgage of house is Susan. Susan’s oldest adult son, John, is SNT trustee. Betty requests house be passed to Susan John and Timothy (John’s brother) when Susan dies. The SNT is to protect Susan’s continuing Medicaid coverage. With Susan’s consent, John can sell thehouse and place it in another SNT for Susan’s housing needs.
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Sure, here's a draft of a Special Needs Trust (SNT) based on the details you provided:
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Special Needs Trust Agreement
This Trust Agreement, made this ___ day of [Month], [Year], by and between Betty (hereinafter referred to as the “Grantor”) and John, as Trustee (hereinafter referred to as the “Trustee”), establishes the following Special Needs Trust (hereinafter referred to as the “Trust”) for the benefit of Susan (hereinafter referred to as the “Beneficiary”).
*. Trust Purpose: The primary purpose of this Trust is to provide for the supplemental needs of Susan while ensuring her continued eligibility for Medicaid and other public benefits programs.
*. Trustee: John is appointed as the Trustee of this Trust. John shall manage, invest, and distribute the Trust assets in accordance with this Trust Agreement.
*. Beneficiary: The Beneficiary of this Trust is Susan.
*. Trust Assets: The initial Trust assets include:
- The residence located at [Address] (hereinafter referred to as the “House”).
- Funds to pay the mortgage on the House.
*. Distributions: The Trustee shall use the Trust assets to provide for the supplemental needs of the Beneficiary that are not covered by public benefits programs. Distributions may include, but are not limited to, housing, medical care, personal care items, education, and transportation.
*. Protection of Public Benefits: The Trust is intended to supplement, and not supplant, any public benefits that the Beneficiary may receive. The Trustee shall ensure that distributions are made in a manner that does not disqualify the Beneficiary from receiving such benefits.
*. Sale of the House: With the consent of the Beneficiary, the Trustee may sell the House and use the proceeds to purchase another residence for the Beneficiary or place the proceeds in another Special Needs Trust for the Beneficiary’s housing needs.
*. Remainder Beneficiaries: Upon the death of the Beneficiary, the Trust assets shall be distributed as follows:
- To Susan's children, John and Timothy, in equal shares.
*. Successor Trustee: In the event that John is unable or unwilling to serve as Trustee, [Name of Successor Trustee] is appointed as the Successor Trustee.
*. Governing Law: This Trust shall be governed by and construed in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the Grantor and the Trustee have executed this Trust Agreement as of the day and year first above written.
[Grantor Signature]
Betty, Grantor
[Trustee Signature]
John, Trustee
---
It's important to review this draft with an attorney to ensure it meets all legal requirements and addresses the specific needs of your situation.
Perfect! Nw I undersatnd. Ok, is this SNT trust added to Betty's existing rebocable ttrust (for she has other heirs of her other personal propety) and if so, how is the SNT added and if not, is it reftred to in Betty's revocable trust or is the SNT a stand alone instrument?
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In Colorado, a Special Needs Trust (SNT) can either be integrated into an existing revocable trust or created as a standalone instrument. Here are the key points:
- Standalone Instrument: The SNT is a separate document specifically created to manage assets for the benefit of the special needs beneficiary.
- Integrated into Revocable Trust: The SNT can be included as a provision within an existing revocable trust. The revocable trust should explicitly reference the SNT provisions and outline how the assets are to be managed for the special needs beneficiary.
Would you like more detailed steps on how to incorporate the SNT into an existing revocable trust?
Yes, if the inclusion in Betty's revocable trust is the safer option than a stand alone SNT. Jiohn is the trsutee of both of these trusts.
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To determine whether integrating the Special Needs Trust (SNT) into Betty's existing revocable trust is the safer option, consider the following:
- Integration into Revocable Trust:
- Simplifies management with one trustee overseeing both trusts.
- Reduces paperwork and potential legal fees.
- Ensures cohesive estate planning, aligning all assets under one document.
- Standalone Instrument:
- Provides clearer separation of assets and purposes.
- May be easier to modify or terminate independently if needed.
Would you like more detailed steps on how to incorporate the SNT into Betty's existing revocable trust?
Yes, please. A template wiuld be great and if better, a Bestow revocable trust example.
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Here's how you can integrate a Special Needs Trust (SNT) into Betty's existing revocable trust. I'll provide a template for adding an SNT provision within a revocable trust document:
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Amendment to Betty's Revocable Trust
This Amendment, made this ___ day of [Month], [Year], by Betty (hereinafter referred to as the “Grantor”), amends the Revocable Trust Agreement dated [Original Trust Date] as follows:
Article [X]: Special Needs Trust Provision
*. Purpose: The purpose of this Special Needs Trust (SNT) provision is to provide for the supplemental needs of Susan (hereinafter referred to as the “Beneficiary”), ensuring her continued eligibility for Medicaid and other public benefits programs.
*. Trustee: John is appointed as the Trustee of this SNT. John shall manage, invest, and distribute the Trust assets in accordance with this provision.
*. Beneficiary: The Beneficiary of this SNT is Susan.
*. Trust Assets: The initial Trust assets include:
- The residence located at [Address] (hereinafter referred to as the “House”).
- Funds to pay the mortgage on the House.
*. Distributions: The Trustee shall use the Trust assets to provide for the supplemental needs of the Beneficiary that are not covered by public benefits programs. Distributions may include, but are not limited to, housing, medical care, personal care items, education, and transportation.
*. Protection of Public Benefits: The SNT is intended to supplement, and not supplant, any public benefits that the Beneficiary may receive. The Trustee shall ensure that distributions are made in a manner that does not disqualify the Beneficiary from receiving such benefits.
*. Sale of the House: With the consent of the Beneficiary, the Trustee may sell the House and use the proceeds to purchase another residence for the Beneficiary or place the proceeds in another Special Needs Trust for the Beneficiary’s housing needs.
*. Remainder Beneficiaries: Upon the death of the Beneficiary, the Trust assets shall be distributed as follows:
- To Susan's children, John and Timothy, in equal shares.
*. Successor Trustee: In the event that John is unable or unwilling to serve as Trustee, [Name of Successor Trustee] is appointed as the Successor Trustee.
*. Governing Law: This SNT shall be governed by and construed in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the Grantor and the Trustee have executed this Amendment as of the day and year first above written.
[Grantor Signature]
Betty, Grantor
[Trustee Signature]
John, Trustee
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Ensure you review this amendment with an attorney to verify it meets all legal requirements and addresses the specific needs of your situation. Would you like any further details?
Can you instead, write it to be included in the revocable trust that Betty is now creating for it is yet to be drafted. This way no legal action must ne taken to add the SNT after the fact.
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Got it! Here’s how you can include a Special Needs Trust (SNT) provision directly into the revocable trust that Betty is now creating:
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Revocable Living Trust Agreement
This Trust Agreement, made this ___ day of [Month], [Year], by and between Betty (hereinafter referred to as the “Grantor”) and John, as Trustee (hereinafter referred to as the “Trustee”), establishes the following Revocable Living Trust (hereinafter referred to as the “Trust”).
Article [X]: Special Needs Trust Provision
*. Purpose: The purpose of this Special Needs Trust (SNT) provision is to provide for the supplemental needs of Susan (hereinafter referred to as the “Beneficiary”), ensuring her continued eligibility for Medicaid and other public benefits programs.
*. Trustee: John is appointed as the Trustee of this SNT. John shall manage, invest, and distribute the Trust assets in accordance with this provision.
*. Beneficiary: The Beneficiary of this SNT is Susan.
*. Trust Assets: The initial Trust assets include:
- The residence located at [Address] (hereinafter referred to as the “House”).
- Funds to pay the mortgage on the House.
*. Distributions: The Trustee shall use the Trust assets to provide for the supplemental needs of the Beneficiary that are not covered by public benefits programs. Distributions may include, but are not limited to, housing, medical care, personal care items, education, and transportation.
*. Protection of Public Benefits: The SNT is intended to supplement, and not supplant, any public benefits that the Beneficiary may receive. The Trustee shall ensure that distributions are made in a manner that does not disqualify the Beneficiary from receiving such benefits.
*. Sale of the House: With the consent of the Beneficiary, the Trustee may sell the House and use the proceeds to purchase another residence for the Beneficiary or place the proceeds in another Special Needs Trust for the Beneficiary’s housing needs.
*. Remainder Beneficiaries: Upon the death of the Beneficiary, the Trust assets shall be distributed as follows:
- To Susan's children, John and Timothy, in equal shares.
*. Successor Trustee: In the event that John is unable or unwilling to serve as Trustee, [Name of Successor Trustee] is appointed as the Successor Trustee.
*. Governing Law: This SNT shall be governed by and construed in accordance with the laws of the State of Colorado.
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IN WITNESS WHEREOF, the Grantor and the Trustee have executed this Trust Agreement as of the day and year first above written.
[Grantor Signature]
Betty, Grantor
[Trustee Signature]
John, Trustee
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Ensure this draft is reviewed by an attorney to confirm it meets all legal requirements and addresses your specific needs. Do you need any further assistance?
Excellent. Thank you. Did you write Article X as a place holder and if so, what other examples of articles that come before it? Example: Betty is appointing a Residuary Trustee to manage and distribute her small personal property like books to other beneficiaries. Please explain what is typically listed in an article? NOLO’s revocable Trust layout did not offer any place to add Articles. So I scrapped it. I mentioned Bestow trust since it is customary to use that template for more complicated trusts and ask if it is appropriate for this scenario?
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Typical articles in a revocable trust can include various provisions to address different aspects of the trust. Here are some common articles:
- Article I: Name of the Trust
- Article II: Declaration of Trust
- Article III: Identification of Grantor, Trustee, and Beneficiaries
- Article IV: Distribution of Trust Assets (including residuary clauses)
- Article V: Trustee Powers and Duties
- Article VI: Successor Trustees
- Article VII: Special Provisions (like SNT)
- Article VIII: Amendment and Revocation
- Article IX: Governing Law
Would you like more details on any specific article?
NOLO’s layout ( Reg Numbers no Roman Numerals) Declaration of Trust Part *. Trust Name Part *. Declaration of Trust Part *. Terminology Part *. Amendment and Revocation A. Amendment or Revocation by Grantor B. Amendment or Revocation by Other Person Part *. Part *. Trustees A. Trustee B. Trustee’s Responsibilities C. Terminology D. Successor Trustee Part *. Trustee’s Management Powers and Duties A. Powers Under State Law B. Specified Powers The trustee’s powers include, but are not limited to: *. *. Part *. Incapacity of Grantor
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To integrate the Special Needs Trust (SNT) within Betty's revocable trust using a layout similar to NOLO's, you can follow this structure:
Declaration of Trust
Part *. Trust Name
- The Betty Revocable Living Trust
Part *. Declaration of Trust
- This trust is established by Betty as the Grantor for the benefit of her designated beneficiaries.
Part *. Terminology
- Definitions of important terms used throughout the trust document.
Part *. Amendment and Revocation
- A. Amendment or Revocation by Grantor: Describes how the Grantor can amend or revoke the trust.
- B. Amendment or Revocation by Other Person: Conditions under which others can amend or revoke the trust.