Special Needs Trusts
Protecting Special Needs Loved Ones & Preserving Government Benefits
If you have a special needs loved one, you will certainly be concerned about protecting them and providing for them financially. This is especially the case for parents of special needs individuals who will want to provide for the care of their special needs child in the event their child outlives them.
Fortunately, the law provides that parents and others may create and fund a Special Needs Trust to provide for the care of a special needs loved one without impacting or reducing government benefits to which the special needs individual would otherwise be entitled. But there is one important caveat – the special needs trust must be carefully tailored so that the assets in the special needs trust are not counted in the assets deemed to be owned by the special needs individual.
The Core Problem
Those with disabilities typically rely on needs-based govenment programs, such as Medicaid and Supplemental Social Security Income (“SSI”), as well as state benefits. Qualifying for such programs requires that the special needs individual have less than a certain level of assets (such as $2,000). If the special needs individual receives money or assets directly (such as through an inheritance or a direct gift), the person can lose benefit eligibility if the threshhold amount is exceeded.
A properly crafted special needs trust allows assets to be contributed for current and future needs of the special needs individual without losing government eligibility. It is critical, however, that the special needs trust be crafted to limit the types of uses that may be made of the trust assets so that government benefits are not adversely impacted. It is also critical to ensure that the trustee understands these eligibility rules so that they do not inadvertently make a distibution that will impact government benefits.
We Create Special Needs Plans For Clients and Their Special Needs Loved Ones.
If you have a special needs loved one, it will be important to maximize the benefits for their care. Let us help you provide for your loved one.