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What Is a WisPACT?

What Is a WisPACT?

by HJ / Thursday, 16 October 2014 / Published in Horn & Johnsen News

Many individuals, whether young or old, are receiving valuable public benefits such as Supplemental Security Income (SSI) and Medical Assistance. Anyone who has gone through the qualification process for these types of entitlement programs is well aware that the application process alone can be a nightmare!

 

Sometimes, a well-meaning relative will leave an inheritance directly to a beneficiary who is receiving public benefits. This can be through a will, or possibly through a beneficiary designation on a bank account, a retirement account, or a life insurance policy. Other times, a person who is receiving public benefits will suddenly become the recipient of a lawsuit settlement – most often, due to a personal injury.

 

Unfortunately, these individuals will usually find that receipt of this money will immediately disqualify them from receiving the public benefits they depend on. Not only will the funds quickly disappear, but the individual must then go through the entire qualification process all over again once the money has been spent. In Wisconsin, the money cannot be gifted to someone else, nor can the money be disclaimed by the beneficiary without resulting in immediate disqualification. This series of events eventually leads to much frustration over something that should have been a relief.

 

There is a solution in Wisconsin to this dilemma: The funds, rather than passing to the individual outright, can instead be placed directly into a supplemental needs trust. While some situations warrant a private supplemental needs trust, most often the best solution is a WisPACT. The Wisconsin Pooled & Community Trusts (or “WisPACTs”) provide for the special needs of persons with disabilities without endangering their eligibility for public benefits.

 

Once the money is placed into a WisPACT, the trustee can make distributions to buy many goods and services for the individual. Note that there are restrictions on distributions from these types of trusts. For example, the trust may only be used for the individual, cash distributions are generally prohibited, and some public benefits programs limit or prohibit distributions for food, shelter, or housing.

 

However, the money in a WisPACT is available for many items that will make the individual’s life more comfortable. The following are some examples of distributions that may be made from a WisPACT: Travel expenses for vacations and holidays, uncovered medical and dental costs (including elective treatments, upgraded eyeglasses, etc.), educational expenses, appliances and furniture, an automobile for the individual’s benefit, home repairs, lawn maintenance and cleaning services, accounting and legal fees, and even extras like cable TV and electronics!

 

If you are interested in exploring the possibility of a WisPACT trust, it is essential that you talk to an attorney who specializes in estate planning right away. Once the money has been transferred directly to the individual, it may be too late to take advantage of this wonderful opportunity.  See www.wispact.org for additional information.

 

Source: New feed

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