Issue link: https://viewer.e-digitaledition.com/i/55875
++++++++++++++++++ +++ +++ 'Spendthrift' What Is a Trust?Part 2 of 2 By Jennifer L. Lile, Esq. IN THE JANUARY-FEBRUARY ISSUE of MD News, we explored what a spendthrift trust is and several common uses for spendthrift trusts. By review, a "spendthrift" trust is a particular type of trust agreement which is designed to pro- tect a beneficiary from wastefully spending his or her share of the trust, or to protect a beneficiary from outside creditors, includ- ing, for example, judgment creditors from malpractice lawsuits or claims from outside parties, such as Medicaid. A growing area in which spendthrift trusts are used is in the context of special needs planning. In this arena, not only is a spendthrift provision like the Ohio version recited in Part 1 of this article important in the trust agreement, but it is also benefi- cial to structure the sub-trust for a special needs beneficiary as a wholly discretionary trust. By granting the trustee full discre- tionary power to decide when, how much, and even if any distributions should be made, such a sub-trust is not countable as a resource of the beneficiary when deter- mining eligibility for needs-based benefits such as Medicaid and Supplemental Security Income. Because special needs can cover a wide spectrum of disorders — from development disabilities such as Down's Syndrome and autism, to mental illnesses such as schizophrenia and bipolar disorder, and even encompassing physi- cally disabling conditions such as multiple sclerosis and severe arthritis – the useful- ness of protecting a loved one's eligibility for government funded medical coverage and financial benefits through the use of a discretionary spendthrift trust is an attrac- tive planning tool. NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice. MARCH-APRIL 2012 n MDNEWS.COM n MD NEWS Cleveland-Akron-Canton | 45 Jennifer Lile is a director with Krugliak, Wilkins, Griffiths & Dougherty Co., LPA. Mrs. Lile is a member of the firm's Estate Planning Practice Group and a former probate court magistrate. She is currently president of the Board of Trustees of the Greater East Ohio Chapter of the Alzheimer's Association and also serves on the board of the Golden Key Center for Exceptional Children. ■ ++++++++++++++++++ LEGAL-EASE + +