The WISH Housing Trust Making LongTerm Affordable Housing
The WISH Housing Trust: Making Long-Term Affordable Housing a Reality for People with Disabilities Wisconsin Initiatives in Sustainable Housing, Inc. 600 Williamson Street Madison, WI 53703 Phone: 608 -819 -0722 Toll-Free: 1 -888 -894 -9646 Email: wishinc@juno. com 1
What is WISH? §A statewide, non-profit organization that created, and now manages, the WISH Housing Trust. §The Arc-Wisconsin and Movin’ Out, Inc. are parent organizations to WISH. They appoint a majority of the WISH board of directors. §The board of directors of WISH is parent and consumer controlled. §As manager of the trust, WISH does the following: - Sets all policies that governs the trust; - Selects and oversees the trustee; replaces the trustee if necessary; -Provides oversight of trust arrangement for individual beneficiaries; - Determines how remainders left to the trust will be used to provide housing to people with disabilities. Wisconsin Initiatives in Sustainable Housing 2
The WISH Housing Trust §Is a charitable, discretionary supplemental needs trust, designed to protect beneficiaries’ eligibility for Medical Assistance and SSI. §Housing is the primary supplemental need that the WISH Trust addresses; but the Trust can also hold cash to address other supplemental needs and burial costs for the named beneficiary. §An initial named beneficiary is identified for each home contributed. The home and other assets contributed are held in a sub-account designated for the named beneficiary for his/her lifetime. §Assets remaining in the sub-account at the death of the beneficiary are retained by the Trust to develop a stock of affordable, sustainable housing for future generations of people with disabilities. Wisconsin Initiatives in Sustainable Housing 3
Why Use a Housing Trust to Own a Home for a Person with a Disability? §The person with a disability has a legally enforceable right to live in the home, according to the provisions in the Asset Contribution Agreement establishing the trust. §Family and others can place money into the trust, to help with on-going costs of maintaining the home, and that money will not count as income for SSI. §A portion of the person’s monthly payment for housing can be saved for major home improvements, without the savings counting as a resource for SSI or Medicaid. §Housemate rent does not count as income for the purposes of SSI because it is paid to the trust, not to the person with a disability. §Proceeds from the sale of the home are not a resource for the person. They can be held for a period in order to buy a different home, or to help pay rent on a property if the person chose, or needed to rent. §Living in the home and paying reduced rent does not count as in-kind income for the person, as long as the person pays the “Presumed Maximum Value” (currently $220 per month). Wisconsin Initiatives in Sustainable Housing 4
Why Use the WISH Housing Trust Instead of a Private Trust? §There may be no family member or friend who lives nearby and is able and willing to act as volunteer trustee for the lifetime of the beneficiary. §Using a corporate trustee for a private trust maybe too expensive and quality may change as bank personnel and ownership changes. §You want to leave a legacy and contribute to the permanent stock of affordable housing for future generations of people with disabilities in your community. §You like the idea that the WISH Trust will always be governed by a non-profit organization, with a mission to serve people with disabilities and a board of directors that is parent and consumer controlled. §The pooled, charitable nature of the WISH Trust has particular advantages over a private trust arrangement. Wisconsin Initiatives in Sustainable Housing 5
Benefits of Using a Pooled, Charitable Housing Trust §Minimum trustee fees are shared among all sub-accounts. §Some fees are eliminated. For example, a tax return does not have to be prepared for each sub-account. §Income earned on invested cash assets and appreciation accrued on homes is not taxable. §Properties are eligible for full property tax exemption. The savings can go to covering the cost of the trustee, management, and oversight services provided to sub-account beneficiaries. §Homeowners with disabilities can leave their homes for use by future generations, and get management services to age-in-place. Wisconsin Initiatives in Sustainable Housing 6
How the WISH Housing Trust Works §A corporate trustee is used. The WISH Board of Directors appoints the trustee. If necessary, the WISH Board can replace the trustee at any time. §The initial corporate trustee is Associated Trust Company. §When a sub-account is set-up, an Asset Contribution Agreement is completed by the sub-account creator. This describes the specific assets placed in the sub-account and how those assets should be used for the beneficiary during his/her lifetime. -A detailed housing plan is written up and attached to the ACA. This plan is updated annually by WISH staff. -If assets are also placed in the trust for supplemental needs, a detailed supplemental needs plan is attached to the ACA and updated annually by WISH staff. Wisconsin Initiatives in Sustainable Housing 7
How the WISH Housing Trust Works §A sub-account advisor is appointed by the sub-account creator. §If the beneficiary has a legal guardian, that person is named as the beneficiary’s legal representative. §Terms associated with the use of the home are specified. -Trustee required to make home available as primary residence for beneficiary. -Beneficiary must enter into Occupancy Agreement with Trustee (lease). -Initial monthly fee is specified and process for determining monthly fee in future years is defined. -Monthly fee can be no more than anticipated real costs to operate property, including set aside for future capital improvements, as determined by the 30 year property preservation study done at the time the sub-account was created, and updated annually as a result of an annual inspection by a qualified inspector. -So long as the person is paying the Presumed Maximum Value, a third party can help or other assets in the sub-account can help pay the monthly fee. Wisconsin Initiatives in Sustainable Housing 8
How the WISH Housing Trust Works §Housemates can be permitted or prohibited by the sub-account creator. The subaccount creator can specify the areas of the home that housemates may have exclusive and/or shared use of. §WISH Inc. staff work with the beneficiary, his/her representative, the sub-account advisor and the involved residential agency to locate suitable housemates. §WISH Inc. staff shall do background checks on housemates and pre-qualify them. Qualified housemates will be referred to the beneficiary. The beneficiary shall decide which housemate she or he prefers from the pool of qualified housemates. §The Trustee must give final approval and then will enter into a lease with the Housemate selected by the beneficiary. §A beneficiary can require the trustee to terminate a lease with a housemate so long as the beneficiary can pay the monthly fee and maintain needed support services. Wisconsin Initiatives in Sustainable Housing 9
How the WISH Housing Trust Works §The beneficiary selects and identifies caregivers to live with him/her in the home. Caregivers can include parents, siblings or spouses. §The live-in caregiver must enter into a lease with the Trustee, but is not required to pay rent, if the sub-account creator wants the caregiver to live in the home rent-free. §A beneficiary can require the trustee to terminate a lease with a live-in caregiver so long as the beneficiary can pay the monthly fee and maintain needed support services to be safe. §If a relative caregiver outlives a beneficiary, she or he can remain in the home (without housemates) if the relative is: elderly; a person with a disability; willing to act as a caregiver for another beneficiary who would move into the home; or willing to act as caretaker for the home in exchange for continued ability to lease exclusive use of a portion of the home. Wisconsin Initiatives in Sustainable Housing 10
How the WISH Housing Trust Works §The trustee can make repairs and improvements to the home to maintain the value of the home. The trustee must consult with the beneficiary about this and give the beneficiary choices regarding appearance, etc. Repairs and improvements, not necessary for maintaining the value of the home, can only be made with the approval of the beneficiary. §If the beneficiary is absent from the home for a prolonged period of time, the beneficiary and the trustee could agree that the trustee could rent the home and apply the rent to the expenses of maintaining the home. §The trustee makes a commitment to helping the beneficiary maintain his/her occupancy, or use the value of the sub-account to secure more affordable housing, in cases of financial hardship. §If other conditions cause the beneficiary or the trustee to determine that the home is no longer viable for the beneficiary, an alternative housing plan is created by WISH, Inc. If an alternative housing plan, acceptable to the beneficiary and the trustee, cannot be created, the home is sold and 100% of the proceeds remains in the sub-account to meet other supplemental needs during the beneficiary’s lifetime. Wisconsin Initiatives in Sustainable Housing 11
How the WISH Housing Trust Works §If the trustee wants to conclude that the home is no longer viable for the beneficiary, they have to follow a set procedure, that involves WISH, Inc. , includes the right to appeal, and requires the development of an alternative housing plan. §WISH, Inc. provides 24 hour property management, pre-qualifies housemates, collects monthly fees, and enters into leases on behalf of the trustee. §WISH, Inc. makes three visits per year to inspect the property, meet with the beneficiary, and update the housing and supplemental needs plans. (The trustee makes one visit per year. ) §WISH, Inc. also provides oversight of the trustee and advocates for the beneficiary if the trustee is not being responsive. Beneficiaries may contact WISH at any time to report a complaint about the trustee. §Where the trustee has power to make a decision, they are relying on the recommendation of WISH, Inc. in most all cases. Wisconsin Initiatives in Sustainable Housing 12
The Process of Setting Up a Sub-Account §WISH offers free planning services to anyone interested in exploring the possibility of setting up an account in the WISH Trust. §Step #1: Determine that person is qualified to be beneficiary of Trust. §Step #2: Identify home to be held by WISH Trust. Note: A home may already be identified (e. g. a family home or a home the person already owns or rents from a family member), or the sub-account creator may intend to purchase a home for the person, to be held by the Trust. §Step #3: Determine if person has support services necessary to live safely in the home, and a housemate(s) to share support services, if required. §Step #4: WISH evaluates the home for acceptance by the WISH Trust, and creates a long-term operating and preservation budget to determine the initial repair fund needed and the monthly rent that must be charged. Wisconsin Initiatives in Sustainable Housing 13
The Process of Setting Up a Sub-Account §Step #5: The sub-account creator works with WISH staff to tailor the Asset Contribution Agreement to their particular situation. §Step #6: WISH staff present the home and sub-account documents to the WISH Board for approval and recommendation for acceptance to the Trustee. §Step #7: WISH staff present the home and sub-account documents to the trustee for final approval. §Step #8: Property management is set up prior to home being transferred into the trust. §Step #9: As soon as home is transferred into trust, WISH does application for property tax exemption. Wisconsin Initiatives in Sustainable Housing 14
Setting Up An Unfunded Sub-Account §If people aren’t ready to use the WISH Trust right now, we encourage them to consider setting up an unfunded account. §This ensures that if anything unexpected happens to the sub-account creator, his/her wishes will be carried out. §The Asset Contribution Agreement allows for assets to be transferred at a future date. §The sub-account does not become irrevocable until assets are transferred, so the Agreement can be changed or revoked completely prior to assets being transferred. §Sub-account creators can set up a power of attorney to transfer assets when the sub-account creator becomes incapacitate. Wisconsin Initiatives in Sustainable Housing 15
Costs of Using the WISH Trust Monthly Cost of WISH Trust & Services depends on whether sub-account holds cash for supplemental needs as well as a home. Monthly Cost covers: 1. Trustee services: fiduciary duties; investing cash assets; one visit per year. 2. 24 -hour property management coordination, annual inspection and long-term property preservation services. 3. Advocacy and oversight services from WISH, Inc. staff, including three visits per year, annual updating of housing plan, and annual updating of supplemental needs plan if sub-account holds assets for supplemental needs. Net monthly cost would be above sub-account costs, less value of Property tax exemption. In some cases, net monthly cost is zero. Please contact WISH to obtain costs for your situation. Wisconsin Initiatives in Sustainable Housing 16
Sample Sub-Account Costs § For a sub-account that holds a home: Monthly Cost of Trust Arrangement: 1. 2. 3. Trustee Fee for Home Property Management Fee Advocacy & Oversight Fee Total: $227. 00 $ 83. 00 $ 96. 00 $ 48. 00 If annual property taxes are $2, 724, net cost is $0. 00. {As example, this is property tax bill for a property in the City of Madison worth $130, 000. } In this example, people get security of trust arrangement, trustee services, full property management services and advocacy/oversight assistance from WISH staff for no additional cost. For people living in homes with higher property taxes, the trust arrangement actually reduces the annual cost to live in these homes. Wisconsin Initiatives in Sustainable Housing 17
Cost of Setting Up a Sub-Account Summary of Costs: Private Attorney Consultation to Refine Housing Sub-Account Agreement Property Inspection and Evaluation, Creation of 30 -Year Plan Recording Fees, Title Insurance, Flood Certification, Credit Reports Account Set-Up Fee Total $5, 000 $ 750 $1, 000 $ 750 $2, 500 Note: WISH may have grants available that can cover part or all of the costs of setting up a sub-account. Please contact us to find out what would be available for your particular situation. An initial reserve fund, typically equal to one year’s operating expenses, is also required to be deposited into the sub-account at the time the property is transferred. WISH has some grant and loan sources that can provide this initial reserve fund, if a family or individual does not have resources available to establish this fund. Wisconsin Initiatives in Sustainable Housing 18
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