Estate Planning: Helping Protect Your Interests

The History of Missouri Special Needs Trusts

Misty A. Watson

Misty A. Watson




Genesis of Current Law: Case Study

A Special Needs Trust (also known as Supplemental Support Trust) is a legal mechanism that allows families to provide funds to relatives with special needs without interfering with their government benefits. The Missouri Division of Family Services (DFS) and the Social Security Administration analyze the special needs person’s assets annually to determine if he or she qualifies for government benefits, such as Medicaid and Supplemental Security Income.

If that person has more than $1,000-2,000 (depending on the program) in assets, he or she will be disqualified and will not receive the benefits. Most families need to maintain government benefits for family members with special needs, but also want to provide additional support.

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Holy Moses, Batman! They’ve Stolen Our Private Placement Exemptions!

Joseph R. Soraghan

Joseph R. Soraghan




The Basic Requirements: Early History

Any sale of a security to a Missouri resident must either be registered with the U.S. Securities and Exchange Commission (“SEC”) and the Missouri Securities Commission, or have at least one specific provable exemption from each of those two requirements.

In 1953, the U.S. Supreme Court ruled that the “private offering” exemption of §4(2) of the Securities Act of 1933 (the “1933 Act”) required that the issuer prove that all “offerees” (not only purchasers) had sufficient investment sophistication and financial well-being (hereinafter “investment suitability”) to establish that they did not “need the protection of registration” under the 1933 Act. SEC v. Ralston Purina, 346 U.S. 119 (1953) But because of the illusory definition of “offerees” as including possibly every person who learned of an offering (not just those receiving an “offer” in the contract sense), the availability and thus the usefulness of the private offering exemption of Section 4(2), was thereafter seriously curtailed.

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Missouri Supreme Court’s Decision in Neske Appears to Have Confirmed that Public Employees Have Contractual Rights to Their Pensions, and Governmental Units Must Fund Pensions to Conform with Principals of Actuarial Soundness


DM Admin




Introduction

Following the victory in the Missouri Supreme Court, in March, 2007, the Firemen’s Retirement System of St. Louis (“FRS”) and its Board of Trustees recently received $49.4 Million from the City of St. Louis (“City”). This payment related to the underfunding of FRS by the City of St. Louis for Fiscal Years 2004, 2005, 2006 and 2007.

The History of the Case

Prior to the disputed fiscal years, the City of St. Louis had fully paid the amount certified by the Trustees, based upon the calculations of the Pension Plan’s actuary. Relying upon various legal authorities and reacting to an alleged budget crisis, the City underfunded the Pension Plans, and provided funding based upon a percentage of payroll unrelated to the actuary’s calculations (i.e., 401(k)-like contributions were made for this defined benefit plan).

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