thanks so much. Clear, concise, and engaging! I don't know if you can answer this, but i'm in Oregon and am curious if you know how the rules and regs would be substantively different.
Thanks for your kind words! Much of what I described is federally-based income tax law, so that would stay the same all over the US. But I don’t know Oregon state income tax rules so I can’t address that specifically.
I am 75 ssi recipient won a 300,000 lawsuit. I would like to set up a 1st party trust. What will this cost ? I want to be able to use the money to buy an electric car etc.
Hi, we love you and you know just enough to be dangerous about your special needs. Trust other name, revocable, living, trust other name, limited liability, company, other name, land trust other name, inheritance trust other name on and on and on it is the same trust with multiple provisions, what are the ABA schools teaching you young lawyers nowadays? Do you know you are close to incompetence for following the Leader, the blind leading the blind estate planners that are eventually going to steal their clients wealth because they did not charge enough to provide a 95% of the work involved with the documents.?
The qualified trust seems like it's geared toward high functioning people. I don't see an adult child with the developmental ability of a toddler who is totally dependent on people 24/7 filling out forms to report income from things funded by the 3rd party Trust. 🤔.
Why is the accountant charging $25 for an Alternative Minimun Tax for estates n trusts on their fee schedule (bill) for a 3rd party SNT that qualifies for a Qualified Disability Trust of $130,000 if only $12 was generated income for the past year? The SNT has not veen invested in any index funds cds etc. There have only been 2 distributions to the beneficiary totalling a little over $1000. Confused.
Hi Ellen, Thank you very much for your informative videos. I have a question about Complex Trust vs. Qualified Trust. I understood your explanation to indicate that all SNTs are Complex Trust because the Trustee has the discretion over distribution of income and principals. If so, then SNTs cannot be viewed as a qualified disability trust, even if they meet all three requirements that you cited (ie, Irrevocable trust, the beneficiary is disabled, and the the beneficiary was under age 65 when the trust established). I believe you also said that within the category of the third party special needs trust, we find two types of trust for tax reasons. It can only be a qualified disability trust or complex trust. Could you please see your video and comment about my question? Thank you again.
Can a SNT for a disabled child who does not qualify for SSI/SSDI income (by age and/or parents' income/recourses) be a Qualified Disability Trust? What's the meaning behind this requirement? Is it to limit it to only poor disabled children?
It’s my understanding that a minor child must be disabled according to the Social Security Administration’s definition of disability. Here is a good place to start: www.ssa.gov/redbook/eng/definedisability.htm?tl=0
Working on taxes this year for my daughters first party special needs trust. It is so hard to find a cpa that specializes in this. Now calling attorneys. Sat on the line with irs today and talked to several people today who couldn’t answer my question. Maybe you know, if my daughter has a first party special needs trust and I use some of the money to buy things for her this year, I bought a computer and several things for her college. Is the money I spent out of the trust a disbursement that is shown in the k-1? Her trust made no money this year . It’s not invested in anything currently, it was not a ton of money. And I knew she might use it if she tried to go to college. Do you know ? Or have an idea of someone who would know ? You should write a book on all of this stuff. It seems so complicated to the rest f us. Thank you for your videos!!! I am learning so much. We applied for ssi when she turned 18, and now that she will turn 20 this year I think she might actually get it, which then it’s something new to learn all about. You need a book !!
Thank you for your kind words! I’m not an expert in income taxes, so I can’t answer your question about where to report income. But if you reach out to our office, I can give you several referrals to accountants who should be able to answer them.
Yes, you should be able to name a 3rd party SNT as the beneficiary of a Roth IRA. This can be a good option in many situations; please check with your financial advisor for details regarding your own situation.
Can a third party special needs trust start out as a revocable grantor trust then after it gets funded become an irrevocable qualified disability trust?
@@ellencookman-EstatePlanningSNT It's complicated to me too because you double talk on Complex Trust and Qualified Disability trust. You say Simple trust= all income goes out to beneficiary, but that not what you showed here, so its = Complex Trust. You said Complex Trust = trustee has discretion over distribution and only $100 tax exemption, but you took $4400. Why, How? Something is not right!
Ok. there are 3 types of trusts, Complex Trust, Complex Trust, and Qualified Disability trust. For 2023, the amount will increase to $4,700 per Instructions for Form 1041 page 1
No. It’s my understanding that only the current/primary/income beneficiary needs to be disabled for the SNT to qualify as a qualified disability trust.
Me and my son were in a car accident when He was around 18 and I got my settlement several months ago and my son is about to get a settlement of around $10K (he was born with Autism PDD). I setup an irrevocable Special Needs Trust to receive the money so it doesn't affect his SSI benefits here in Florida. I know that insurance settlements are not taxed what if I were to setup a GoFundMe or Patreon account that were to be paid directly to the Trust. Would that money be taxable?
I’m so sorry to hear about your accident. I don’t think money from a GoFundMe account would be subject to income taxes, but I suggest you check with an attorney in Florida first.
Hi Ellen thanks so much for your videos im still trying to wrap my head around the tax portion of a 3rd party special needs trust im trying to ve as well informed as possible because im currently having an attorney draft a special needs trust. My mom is the one in charge of the trust I receive ssi and im a bit confused and need some guidance. My mom has a house and the money is supposed t be split 3 ways between the kids after my mom passes away Say the house sells for 70,000 and i get 23,000 Is this taxed at the 37% or is it taxed on what i make off ssi every year which is currently 841 a month and 10,060 a year I would like to save as much as i can if they go off my tax bracket is would be 2,000 a year that would keep getting deducted from that 23,000 and can dwindle down pretty quickly I also am going to have to see if my attorney is adding this as a qualified disabled trust So if i just left the money in there would i have to pay 2,000.a year in taxes on it
Hello Jason - Thanks for your message! As I read your message, you’re wondering if the entire $23K held in your SNT would be subject to income taxes? This is not the case. It’s only the dividends and/or interest generated from the assets in the SNT that would need to be reported as income. I hope that clarifies things!
If the house is sold for the value at your mom passing, then there no income from the sale. No income = no tax. Even if there was an income gain, then your mom estate would pay tax as long as it in her name.
Very informative. Thank you.
If the dividends are qualified dividends they would the taxed at the long term capital gains rate and not the compressed tax rates.
thanks so much. Clear, concise, and engaging! I don't know if you can answer this, but i'm in Oregon and am curious if you know how the rules and regs would be substantively different.
Thanks for your kind words! Much of what I described is federally-based income tax law, so that would stay the same all over the US. But I don’t know Oregon state income tax rules so I can’t address that specifically.
I believe there is a unjustified sacrifice for us to rely in so many things that you specified
Yeah, I’m gonna find a way to get rid of this taxes business for indirect taxes against the law
I am 75 ssi recipient won a 300,000 lawsuit. I would like to set up a 1st party trust. What will this cost ? I want to be able to use the money to buy an electric car etc.
Hi, we love you and you know just enough to be dangerous about your special needs. Trust other name, revocable, living, trust other name, limited liability, company, other name, land trust other name, inheritance trust other name on and on and on it is the same trust with multiple provisions, what are the ABA schools teaching you young lawyers nowadays? Do you know you are close to incompetence for following the Leader, the blind leading the blind estate planners that are eventually going to steal their clients wealth because they did not charge enough to provide a 95% of the work involved with the documents.?
The qualified trust seems like it's geared toward high functioning people. I don't see an adult child with the developmental ability of a toddler who is totally dependent on people 24/7 filling out forms to report income from things funded by the 3rd party Trust. 🤔.
This is a good question. It’s typically the trustee of the trust that does the reporting.
Just shows how government steals from weak 😢
Why is the accountant charging $25 for an Alternative Minimun Tax for estates n trusts on their fee schedule (bill) for a 3rd party SNT that qualifies for a Qualified Disability Trust of $130,000 if only $12 was generated income for the past year?
The SNT has not veen invested in any index funds cds etc. There have only been 2 distributions to the beneficiary totalling a little over $1000. Confused.
I’m not sure about that, but would be curious to hear what your accountant says.
Hi Ellen,
Thank you very much for your informative videos. I have a question about Complex Trust vs. Qualified Trust. I understood your explanation to indicate that all SNTs are Complex Trust because the Trustee has the discretion over distribution of income and principals. If so, then SNTs cannot be viewed as a qualified disability trust, even if they meet all three requirements that you cited (ie, Irrevocable trust, the beneficiary is disabled, and the the beneficiary was under age 65 when the trust established). I believe you also said that within the category of the third party special needs trust, we find two types of trust for tax reasons. It can only be a qualified disability trust or complex trust. Could you please see your video and comment about my question? Thank you again.
Sorry for the confusion - a Qualified Disability Trust is a type of Complex Trust, but it gets special tax treatment.
Can a SNT for a disabled child who does not qualify for SSI/SSDI income (by age and/or parents' income/recourses) be a Qualified Disability Trust? What's the meaning behind this requirement? Is it to limit it to only poor disabled children?
It’s my understanding that a minor child must be disabled according to the Social Security Administration’s definition of disability. Here is a good place to start: www.ssa.gov/redbook/eng/definedisability.htm?tl=0
Working on taxes this year for my daughters first party special needs trust. It is so hard to find a cpa that specializes in this. Now calling attorneys. Sat on the line with irs today and talked to several people today who couldn’t answer my question. Maybe you know, if my daughter has a first party special needs trust and I use some of the money to buy things for her this year, I bought a computer and several things for her college. Is the money I spent out of the trust a disbursement that is shown in the k-1? Her trust made no money this year . It’s not invested in anything currently, it was not a ton of money. And I knew she might use it if she tried to go to college. Do you know ? Or have an idea of someone who would know ? You should write a book on all of this stuff. It seems so complicated to the rest f us. Thank you for your videos!!! I am learning so much. We applied for ssi when she turned 18, and now that she will turn 20 this year I think she might actually get it, which then it’s something new to learn all about. You need a book !!
Thank you for your kind words! I’m not an expert in income taxes, so I can’t answer your question about where to report income. But if you reach out to our office, I can give you several referrals to accountants who should be able to answer them.
Can one fund a 3rd party special needs trust with a Roth IRA at time of parent passing? Is this a good option?
Yes, you should be able to name a 3rd party SNT as the beneficiary of a Roth IRA. This can be a good option in many situations; please check with your financial advisor for details regarding your own situation.
Can a third party special needs trust start out as a revocable grantor trust then after it gets funded become an irrevocable qualified disability trust?
😅it seems simple to you and easy but very complicated to me 😢
I hear you. It can be complicated to consider all this when planning. Reach out to our office and we can guide you through this process.
@@ellencookman-EstatePlanningSNT It's complicated to me too because you double talk on Complex Trust and Qualified Disability trust. You say Simple trust= all income goes out to beneficiary, but that not what you showed here, so its = Complex Trust. You said Complex Trust = trustee has discretion over distribution and only $100 tax exemption, but you took $4400. Why, How? Something is not right!
Ok. there are 3 types of trusts, Complex Trust, Complex Trust, and Qualified Disability trust. For 2023, the amount will increase to $4,700 per Instructions for Form 1041 page 1
For a qualified disability trust do successor beneficiaries have to be disabled?
No. It’s my understanding that only the current/primary/income beneficiary needs to be disabled for the SNT to qualify as a qualified disability trust.
Thank you very much for clarifying @@ellencookman-EstatePlanningSNT
Me and my son were in a car accident when He was around 18 and I got my settlement several months ago and my son is about to get a settlement of around $10K (he was born with Autism PDD). I setup an irrevocable Special Needs Trust to receive the money so it doesn't affect his SSI benefits here in Florida. I know that insurance settlements are not taxed what if I were to setup a GoFundMe or Patreon account that were to be paid directly to the Trust. Would that money be taxable?
I’m so sorry to hear about your accident. I don’t think money from a GoFundMe account would be subject to income taxes, but I suggest you check with an attorney in Florida first.
Hi Ellen thanks so much for your videos im still trying to wrap my head around the tax portion of a 3rd party special needs trust im trying to ve as well informed as possible because im currently having an attorney draft a special needs trust.
My mom is the one in charge of the trust I receive ssi and im a bit confused and need some guidance.
My mom has a house and the money is supposed t be split 3 ways between the kids after my mom passes away
Say the house sells for 70,000 and i get 23,000
Is this taxed at the 37% or is it taxed on what i make off ssi every year which is currently 841 a month and 10,060 a year
I would like to save as much as i can if they go off my tax bracket is would be 2,000 a year that would keep getting deducted from that 23,000 and can dwindle down pretty quickly
I also am going to have to see if my attorney is adding this as a qualified disabled trust
So if i just left the money in there would i have to pay 2,000.a year in taxes on it
Hello Jason - Thanks for your message! As I read your message, you’re wondering if the entire $23K held in your SNT would be subject to income taxes? This is not the case. It’s only the dividends and/or interest generated from the assets in the SNT that would need to be reported as income. I hope that clarifies things!
If the house is sold for the value at your mom passing, then there no income from the sale. No income = no tax. Even if there was an income gain, then your mom estate would pay tax as long as it in her name.