Overview
The Arc Master Trust I was established in 1988. Typically, Trust I accounts are funded by the parents or grandparents of a person receiving government benefits, although some Trust I accounts have been funded with assets originally belonging to the Beneficiary. Most parents or grandparents (the Donors) choose to fund an Arc Trust I account for their child or grandchild upon their death - either through their will, living trust, retirement account or life insurance proceeds. Although most families choose to fund an Arc Trust at the death of the second parent or grandparent, this is not a requirement. In limited instances, it may be beneficial to fund the trust account during the Donor's lifetime. This, of course, is a personal decision.
A typical Trust I account is annuitized over the course of the Beneficiary's lifetime, creating an annual spending projection. Setting an annual spending limit ensures that there will always be money in the Beneficiary's account throughout the course of his or her lifetime.
The Arc Trust staff works with one or more Key People when administering the trust for the Beneficiary. A Key Person is a trusted family member, friend, case worker or other person whose function is to help communicate the Beneficiary's needs and desires to The Arc Trust staff. The Key Person assists The Arc Trust in determining the most appropriate way to use the Beneficiary's account in order to provide the best possible quality of life, without jeopardizing eligibility for government benefits.
The Donor is the person (or persons) funding the trust. When the Donor is a person other than the Beneficiary, then the Donor retains control over what happens to funds left in the Beneficiary's account if the Beneficiary passes away prematurely. When the Beneficiary passes away, any funds remaining in his or her trust automatically pass to the named Remaindermen. The Donor names both the Key Person(s) and the Remaindermen of the trust upon enrollment, and retains the power to change both the Key Person(s) and the Remaindermen at any time between enrollment and the funding of the trust. In other words, if you fund an Arc Trust I for your child or grandchild, you will have complete control regarding who assists The Arc Trust in administering the account, as well as who receives any remaining funds in the account when the Beneficiary passes away.
Once the trust is funded, The Arc Trust assumes the responsibility of authorizing disbursements in the best interest of the Beneficiary. In doing so, The Arc Trust acts in accordance with the terms of the Joinder Agreement, the Indiana Trust Code, its common law fiduciary duty to the Beneficiary and the pertinent state and federal statutes and regulations governing the inception, administration and termination of Special Needs Trusts.
