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Trusts: Special Needs Trusts

This quiz will test your knowledge of Special Needs Trusts.

14 Questions Published
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Questions

Question 1 Multiple Choice (Single Answer)

What is the primary purpose of a Special Needs Trust?

  1. To provide financial support for individuals with disabilities.
  2. To reduce the tax liability of individuals with disabilities.
  3. To protect the assets of individuals with disabilities from creditors.
  4. To provide a legal framework for individuals with disabilities to manage their own finances.
Question 2 Multiple Choice (Single Answer)

Who can establish a Special Needs Trust?

  1. Individuals with disabilities.
  2. Parents of individuals with disabilities.
  3. Legal guardians of individuals with disabilities.
  4. All of the above.
Question 3 Multiple Choice (Single Answer)

What types of assets can be placed in a Special Needs Trust?

  1. Cash.
  2. Real estate.
  3. Investments.
  4. All of the above.
Question 4 Multiple Choice (Single Answer)

How does a Special Needs Trust affect the beneficiary's eligibility for government benefits?

  1. It disqualifies the beneficiary from receiving government benefits.
  2. It reduces the amount of government benefits the beneficiary receives.
  3. It has no impact on the beneficiary's eligibility for government benefits.
  4. It increases the amount of government benefits the beneficiary receives.
Question 5 Multiple Choice (Single Answer)

What is the role of the trustee of a Special Needs Trust?

  1. To manage the assets of the trust.
  2. To make distributions to the beneficiary.
  3. To ensure that the beneficiary's needs are met.
  4. All of the above.
Question 6 Multiple Choice (Single Answer)

What are some of the advantages of using a Special Needs Trust?

  1. It provides financial support for individuals with disabilities without jeopardizing their eligibility for government benefits.
  2. It protects the assets of individuals with disabilities from creditors.
  3. It allows individuals with disabilities to maintain control over their finances.
  4. All of the above.
Question 7 Multiple Choice (Single Answer)

What are some of the disadvantages of using a Special Needs Trust?

  1. They can be expensive to establish and administer.
  2. They can be complex to manage.
  3. They can limit the beneficiary's ability to receive government benefits.
  4. All of the above.
Question 8 Multiple Choice (Single Answer)

What is the difference between a Special Needs Trust and a Pooled Trust?

  1. A Special Needs Trust is established for an individual beneficiary, while a Pooled Trust is established for a group of beneficiaries.
  2. A Special Needs Trust can hold a variety of assets, while a Pooled Trust can only hold cash.
  3. A Special Needs Trust is managed by a trustee, while a Pooled Trust is managed by a professional investment manager.
  4. All of the above.
Question 9 Multiple Choice (Single Answer)

What is the Medicaid payback provision?

  1. A provision that requires the state to be reimbursed for Medicaid benefits paid to a beneficiary of a Special Needs Trust after the beneficiary's death.
  2. A provision that requires the beneficiary of a Special Needs Trust to repay the state for Medicaid benefits received.
  3. A provision that limits the amount of assets that can be placed in a Special Needs Trust.
  4. None of the above.
Question 10 Multiple Choice (Single Answer)

What is the Crummey power?

  1. A power that allows the beneficiary of a Special Needs Trust to withdraw a limited amount of money from the trust each year.
  2. A power that allows the trustee of a Special Needs Trust to make distributions to the beneficiary without regard to the beneficiary's needs.
  3. A power that allows the grantor of a Special Needs Trust to modify or revoke the trust.
  4. None of the above.
Question 11 Multiple Choice (Single Answer)

What is the difference between a d(4)(A) trust and a d(4)(C) trust?

  1. A d(4)(A) trust is a Special Needs Trust that is established for an individual with a disability who is under the age of 65, while a d(4)(C) trust is a Special Needs Trust that is established for an individual with a disability who is over the age of 65.
  2. A d(4)(A) trust is a Special Needs Trust that can hold a variety of assets, while a d(4)(C) trust can only hold cash.
  3. A d(4)(A) trust is managed by a trustee, while a d(4)(C) trust is managed by a professional investment manager.
  4. None of the above.
Question 12 Multiple Choice (Single Answer)

What is the ABLE Act?

  1. An act that allows individuals with disabilities to save money in a tax-advantaged account without jeopardizing their eligibility for government benefits.
  2. An act that provides financial assistance to individuals with disabilities.
  3. An act that creates a national registry of individuals with disabilities.
  4. None of the above.
Question 13 Multiple Choice (Single Answer)

What are some of the tax implications of Special Needs Trusts?

  1. Special Needs Trusts are exempt from federal income tax.
  2. Special Needs Trusts are exempt from state income tax.
  3. Distributions from Special Needs Trusts are not taxable to the beneficiary.
  4. All of the above.
Question 14 Multiple Choice (Single Answer)

What are some of the ethical considerations related to Special Needs Trusts?

  1. The use of Special Needs Trusts can be seen as a way to avoid paying for government benefits.
  2. Special Needs Trusts can be used to protect the assets of wealthy individuals with disabilities from creditors.
  3. Special Needs Trusts can be used to ensure that individuals with disabilities have access to the resources they need to live a full and meaningful life.
  4. All of the above.
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