Special Needs Planning
If you currently provide care for a child or loved one with special needs (such as mental or physical disabilities), you are likely concerned about what may happen to them when you are no longer able to provide and care for them.
An outright gift (either during your life or as part of a will) may prevent your loved ones from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs because such programs can terminate or phase out based on the recipient’s assets. However, public monetary benefits provide only for the bare necessities and essential medical care. As you can imagine, these limited benefits may not provide those loved ones with the resources that would allow them to enjoy a richer quality of life Fortunately, the government has established rules allowing assets to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI and Medicaid, as long as certain requirements are met.
Our law firm can help you set up a Special Needs Trust so that government benefit eligibility is preserved while at the same time assets are provided that will meet the supplemental needs of the person with a disability. Funds from the trust cannot be distributed directly to the disabled beneficiary. Instead, it must be disbursed to third parties who provide goods and services for use and enjoyment by the disabled beneficiary.
The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved ones’ eligibility such as:
- Annual check-ups at an independent medical facility
- Attendance of religious services
- Supplemental education and tutoring
- Out-of-pocket medical and dental expenses
- Transportation (including purchase of a vehicle)
- Maintenance of vehicles
- Purchase materials for a hobby or recreation activity
- Funds for trips or vacations
- Funds for entertainment such as movies, shows or ballgames.
- Purchase of goods and services that add pleasure and quality to life: computers, videos, furniture, or electronics.
- Athletic training or competitions
- Special dietary needs
- Personal care attendant or escort
Special Needs Trusts are a critical component of your estate planning if you have disabled beneficiaries for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand alone trusts funded with a separate asset like a life insurance policy or they can be a sub-trust in your existing living trust.