SNA at NAMI Convention

Housing, Guardianship and Charitable Giving

During the recent NAMI (National Alliance on Mental Illness) convention in Seattle, hundreds of visitors stood in line at the SNA booth to ask member attorneys about public benefits and the appropriate use of special needs trusts (SNTs). Interest was similarly intense during three estate planning breakout sessions led by SNA members.

Using a Special Needs Trust to Provide Housing

SNA board member Stephen W. Dale, Pacheco, California, discussed the intricacies of using an SNT to purchase a home for a loved one with disabilities. “Ensuring appropriate housing is one of the biggest issues that families face,” he noted.

If a residence is purchased outright by a special needs trust, it is not considered an asset when establishing the beneficiary’s eligibility for public benefits such as SSI. On the other hand, because monthly mortgage payments by the trust are considered to be in-kind support and maintenance, they will reduce payouts by certain government programs. Renovations, such as the building of a handicapped-accessible bathroom, will not affect benefits, while paying for such household operating expenses as property taxes and utilities, will.

Guardianships, Powers of Attorney and Other Options

(From left) SNA members Stephen Dale and Brian Rubin at the estate planning breakout session.

SNA board member Brian Rubin, Buffalo Grove, Illinois, discussed guardianship and its alternatives. In most states, a person is assumed to be legally competent at the age of 18 unless a court formally deems otherwise, so it’s important to determine whether or not the individual will be able to make important life decisions on his or her own. When a person lives with mental illness, the question of guardianship is particularly complex, since instances of incapacity may come and go. Therefore, it’s advisable to consider alternatives, such as establishing power of attorney, a “representative payee” for government benefits or a joint bank account.

Brian stressed that a balance should be maintained between protection and intrusion, citing the difference between lacking comprehension and making controversial decisions. “When evaluating guardianship options, one should preserve the ward’s opportunity to exercise all rights within his or her comprehension and judgment,” he said. “Individuals with mental illness should have the same right to make mistakes as anyone else.”

Family members sometimes resist the responsibilities posed by guardianship, he explained, because they fear the resulting liability. What if the individual causes an automobile accident or runs up credit card debt that he/she can’t honor? In certain instances, relatives may choose to establish and give guidance to a corporate guardian.

Combining Special Needs and Charitable Planning

James McCarten discusses charitable giving.

SNA member James McCarten, Nashville, Tennessee, spoke about ways in which charitable contributions can generate income, while reducing estate, inheritance and income taxes. “You can potentially do a lot of good, financially thanking a non-profit that has helped your family, at the same time that you’re funding an SNT or figuring out what to do with a retirement plan,” he explained. “But you need to do the planning up front.”

Charitable gift annuities are contractual agreements through which an individual transfers assets to a charity in exchange for an income stream.

A common example involves appreciated property that the charity can sell without incurring capital gains taxes. Similarly, charitable remainder trusts are designed to provide income to an individual or an SNT for a fixed term, with the remainder going to the charity. Charitable lead trusts, on the other hand, give a portion of the generated income first to a designated charity, with the remainder going to a beneficiary at a specified time.

Audio CDs and PowerPoints of all presentations made at the NAMI convention can be obtained at