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How Supplemental Needs Trust Funds are Invested
Beneficiaries and their trust representatives frequently discuss with the Alabama Family Trust staff how trust funds can be used.  When they have questions about how trust funds are invested, they reach out to our investment partner, Warren Averett Asset Management. 

If your residents want to avoid spending their assets down to no more than $2,000 in order to qualify for Medicaid, their families might benefit by talking to an attorney experienced with supplemental needs trusts (SNTs).  Here are some insights into the Alabama Family Trust trust fund investment process.

In 2018, Alabama Family Trust’s board of trustees selected Warren Averett Asset Management to invest trust funds. Warren Averett is ranked as one of the Top 50 Fee-Only Wealth Management Firms in the US by CNBC.  Four of its seven offices are located in Alabama, and its 50+ advisors advise on $2.6 billion in assets.
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Alabama Family Trust Investment Objectives & Risk Tolerance Questionnaire

Before trust funds are invested, each trust representative completes an in-depth investment objectives and risk assessment questionnaire which serves as a guide for the trust representative to select investment options with Warren Averett.  The goal is to identify the investment objectives and risk parameters for each beneficiary’s unique situation. The questionnaire introduces these topics:

 
Requirements for investment income – In many cases, trust income needs to be invested in a way to be readily available to meet a beneficiary’s immediate daily expenses.  Other beneficiaries may have enough funds for near-term expenses but need an investment plan that focuses on long-term growth.

Investment strategy goal – Some trust representatives require full liquidity for immediate use without regard for inflation.  Others are looking to increase the funds in the trust by investing to gain higher than average returns.  It helps if trust representatives have some financial acumen to make the right investment decisions for the supplemental needs trust.

Investment objective – Trust representatives are asked about the needs for income, capital appreciation, and the risk tolerance or volatility that they can handle.  This factor has been especially important during 2020’s market volatility due to the pandemic.

Timeline for the trust –Trust representatives can thoughtfully consider the difference in investment goals whether they expect a 1- to 3-year or a decade(s)-long timeline. The longer the timeline, the impact of market volatility decreases. 

Investment Options
Based on the score from the questionnaire, Warren Averett will discuss which of several investment options might be best for a specific beneficiary’s trust. 
 
Reports on Investments
A Warren Averett report on Alabama Family Trust funds in aggregate is posted on Alabama Family Trust’s Documents webpage each month, and individual trust reports are provided monthly to the trust representatives.

The partnership between Warren Averett Asset Management and Alabama Family Trust sets up a great team for supplemental needs trusts. 

When your residents set up a trust using Alabama Family trust, they may financially qualify for Medicaid sooner and have funds for more services and items than supported by Alabama Medicaid and other means-tested government benefits, while having peace of mind that their trust funds are being invested the way they choose. Supplemental needs trusts may be a good option for your private pay residents to consider as well.  

Although an attorney is not required, Alabama Family Trust recommends families work with an attorney experienced with supplemental needs trusts.

For more information, visit www.alabamafamilytrust.com
Copyright © 2020 Alabama Family Trust All rights reserved.

www.alabamafamilytrust.com 
 
Direct: 205-313-3915  |   Toll-free: 1-844-238-4630
2820 Columbiana Road, Suite 103 Vestavia Hills, AL 35216

The Alabama Family Trust staff is working remotely due to the pandemic, but we are available with only a phone call or email.

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