Overview
The Arc of Indiana Master Trust II was established in 1995 in response to legislation enacted by the United States Congress in 1993. The Omnibus Budget Reconciliation Act of 1993 (OBRA '93) made it possible for people to fund a Special Needs Trust with their own money and still retain Medicaid. Congress acted again in 1999 with The Foster Care Independence Act, making it possible for people to fund a Special Needs Trust with their own money and still retain eligibility for SSI.
In Indiana, thousands of people have benefited from these laws. People receiving an inheritance, a lump sum back-payment from Social Security or a personal injury settlement have put their money into a Special Needs Trust rather than spend the money quickly just to stay eligible for government benefits.
Initially, Trust II was funded with smaller amounts of money, rarely exceeding $20,000. Accordingly, the intent for Trust II was not to be an investment vehicle so much as a temporary safe harbor for persons who have enough money to jeopardize public assistance benefits, but not nearly enough to make long-term plans. For the sake of simplicity regarding taxes, Trust II investments are limited to the purchase of EE series United States savings bonds. All other funds are kept in a non-interest bearing checking account, which currently holds approximately $8.6 Million. The Arc Trust II is ideal for, but not limited to, the following situations: