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Small firm.228.215.13671215 Government Street | Ocean Springs820 Manila Street | Lucedalewww.BDPGulfCoast.comG. Charles Bordis, IV | Joshua W. Danos | Randy %u201cBubba%u201d PierceMediation &ArbitrationServices RANDY%u201cBUBBA%u201dPIERCEBig resultsor as a stand-alone inter vivos trust. If thelatter is chosen, relatives or other persons maymake distributions, gifts, or bequests to thattrust while the parents are living (which is notpossible for a testamentary trust). The thirdparty trust may be revocable by the parents or,if they need to remove assets from their estatesfor tax or other reasons, it may be irrevocable.The revocable trust becomes irrevocable at thebeneficiary%u2019s death.Solution: First party special needstrustWhen a litigation settlement or probatedistribution is to be made outright to a childor adult with disabilities, SSI or Medicaidbenefits may be retained by using a %u201cfirstparty special needs trust.%u201d Also, the fundsof a disabled ward of a conservatorship maybe transferred by court order to a first partytrust, thereby enabling the beneficiary toobtain SSI or Medicaid benefits. 42 U.S.C. %u00a71396p(d)(4)(A) provides that Medicaid willnot count %u201c[A] trust containing the assets ofan individual under age 65 who is disabled (asdefined in section 1614(a)(3)) and which isestablished for the benefit of such individualby the individual, a parent, grandparent, legalguardian of the individual, or a court if theState will receive all amounts remaining inthe trust upon the death of such individualup to an amount equal to the total medicalassistance paid on behalf of the individualunder a state plan under this title.%u201dTherefore, a mentally competent PWDor the parent, grandparent, legal guardian/conservator, or a court may create anirrevocable trust for the sole benefit of thedisabled beneficiary. The trust must containspecific language that ensures that, after certaintaxes and wrap-up administrative costs, theMedicaid agency will be repaid all expensesthey paid for the beneficiary%u2019s care beforeany remaining funds may pass to remainderbeneficiaries. Once deposited into an accountfor such a trust, the funds will no longer bedeemed owned by the beneficiary. Note:Funds or property contributed to a first partypayback trust by third parties will becomesubject to the Medicaid reimbursement claim.If all trust assets are spent for the benefit ofthe beneficiary prior to death, there will be noMedicaid recovery.Solution: The ABLE AccountThe Stephen Beck, Jr. Achieving aBetter Life Experience Act of 2014 (ABLEAct), provides an opportunity for %u201cqualified%u201dindividuals with special needs to have a taxfree savings account that will support theirhealth and independence while preservingtheir means-tested government benefits. EachState must enact its own governing legislation.Mississippi%u2019s ABLE-enabling legislation isfound at MCA %u00a7 43-28-1 et seq. Generally,a single ABLE account may be created by orfor a person with a disability that began priorto age 46, with annual contributions to suchaccount not to exceed $19,000 (the annualgift tax exclusion amount in 2026). If theaccount exceeds the state 529 account limit($235,000 in Mississippi), the account will becounted as a resource for Medicaid eligibility.If the account balance exceeds $100,000, theindividual%u2019s SSI will be %u201csuspended%u201d untilthe account is used for allowed expenses andbrought back below that level. In addition,an ABLE beneficiary who earns incomefrom employment may make additionalcontributions not to exceed the lesser of theirearned income and the Federal Poverty Level($15,650 in 2025), in addition to their annualcontribution limit ($19,000).An ABLE account may be openedA %u201cthird party%u201d specialneeds trust is fundedby a parent, spouse orsomeone other than thedisabled beneficiary, andcan be funded with gifts,life insurance, retirementaccount beneficiarydesignation, or bequestsat death through the thirdparty%u2019s will or trust.16 WINTER 2026