The DD Endowment Trust Fund offers two types of individual trust accounts to meet the needs of families and individuals. The source of the funds going into the account determines which trust needs to be opened. An individual may have more than one account with this program.
Trust I (Third Party)
A Trust I is an account that can only receive contributions from a third party (anyone who is not the beneficiary). Upon the death of the Beneficiary, the remaining private contributions and earnings are distributed according to how the trust documents were spelled out when the account was opened. In other words, remaining funds will be dispersed as directed in the trust documents. Unlike Trust II (see below), they are not paid to the state as payment recovery for government services received during the person’s life.
Trust II (Self-Settled)
A Trust II is an account in which only the Beneficiary’s funds may be contributed. Upon the death of the Beneficiary, the state is entitled to recover dollar for dollar for services provided. It is highly unlikely, if the individual has been receiving services for any length of time, that there will be any funds left after the state recovers from the account. This is a requirement of all special needs trusts funded with the Beneficiary’s funds according to Social Security law.
The difference between a Trust I and Trust II:
- The source of the funds going into the account.
- What happens to the remaining funds in the trust upon the death of the Beneficiary.
Other than those two differences, all management, policies, contributions and disbursements are managed the same for both types of trusts.
Use of Funds
The Trust allows families and individuals to save funds—either for the near future or decades from now—to pay for many supplemental services, supports, activities, and purchases that improve an individual’s quality of life.
Withdrawals from the accounts are referred to as disbursements. Disbursements from the accounts are as varied as the interests of the individuals enrolled in the program, but they all have one purpose: to enrich the life of the Beneficiary.
Some uses of trust funds may include:
- Education, information and training opportunities
- Assistance with personal care, skill building, financial management, medical monitoring, meal preparation, shopping, home maintenance and house cleaning
- Unusual or extraordinary disability-related shelter expenses
- Capital expenses, including environmental modifications and transportation
- Respite care
- Disability-related support groups
- Transportation costs
- Vacation, travel and recreation
- Employment supports and tuition
- Advocacy and legal services
- Social productivity and personal fulfillment activities, such as volunteering, club membership and recreation
- Assistive technology, including computers and electronic equipment
- Medical care, counseling, therapies and other health related services, including alternative practitioners, not covered by public benefits
- Birthday and holiday presents for the beneficiary to give to others
- Individual trust account expenses, including: enrollment, bookkeeping, tax return preparations and filing, tax payments, annual management expenses and other trust related fees
- Pre-paid burial expenses*
- Items the Trust Manager deems appropriate and reasonable within the guidelines of the Governing Board
*Funds in the trust can only be expended during the Benefciary’s lifetime. Because the trust account ceases to exist upon their death, and funds cannot be disbursed for related expenses after the beneficiary has passed away, we encourage pre-planning related to burial and funeral expenses.
Expenses Not Allowed Under the Trust for SSI Recipients
Expenses that cannot be paid from the trust include: shelter costs (rent, heat, power, water, sewer, garbage, etc.) and food, which are to be paid from the Benefciary’s Social Security benefit.
Incentives and Costs to Participate
The DD Endowment Trust Fund Program and the Trust Fund Partners are able to keep costs to a minimum with sound oversight and management. is allows more of the dollars to go towards the beneficiary’s financial future, instead of costly fees.
Although the fees for the program are minimal, and lower than most managed trusts, we are currently crediting back to the trust account the following amounts as additional incentives:
- 100% of the initial $600 enrollment fee
- 100% of the annual tax preparation and filing fee
- $75 of the 1% annual management fee (annual maximum fee $750)
“As parents of an adult son with disabilities, we are well aware of how uncertain the future may be for our son. His DD Endowment Trust Fund is one thing we can do to reduce that future uncertainty.” —MJW, Parent
All fees will be deducted from private contributions and will then be credited back to the individual trust accounts in the form of State Matching Funds. Although a Beneficiary may have more than one account, only the first account opened qualifies to receive the incentives on fees. (For qualifications to receive current incentives see next section.)
There is a one-time enrollment fee of $600.00. This is a fee to open the account. With the current incentive, the account will open with a $600.00 balance in State Matching Funds.
Tax Return Preparation and Filing Fees
The Trust is required to prepare and file an annual individual tax return for each trust account. Currently, the fee is credited back to the trust account 100%. Contact The Arc Washington State for the current fee.
Annual Management Fee
One year after the initial contribution, and yearly thereafter, the account will be charged an annual management fee of $75 or 1% of the account’s balance, whichever is greater. The fee will not exceed $750 per year. The state currently credits back $75 of the annual management fee per year.
Qualifications to Receive Current Incentives
- Minimum Contribution Requirement
The minimum contribution requirement to keep an account in good standing, and qualify for the incentives on the fees, is to invest the equivalent of $25 a month. Contributions may be made on a schedule that meets your needs, whether that is monthly, periodically, or annually.
- Three Year Vesting Period
An account becomes vested by accumulating a minimum of $25 per month of private contributions for three consecutive years. Contributions in excess of $25 per month may be applied to future months for the purpose of qualifying for current incentives, but may not be applied to past months for vesting purposes.
An account must meet both the minimum contribution requirement and the three year vesting requirement before a Benefciary may use the State Matching Funds for services and supports.
“My husband and I looked at a couple of other trust products, one through a bank and one through an insurance company. The DD Endowment was considerably less expensive to manage and had the backing of our state government, which made it feel very secure. It has been a great move for us and our daughter. Also, very easy to use.” —S.A., Parent