Special Needs Planning
What is the purpose of a Special Needs Trust?
While you can certainly bequest money and assets to those with special needs, such a bequest
may prevent them from qualifying for essential benefits under the Supplemental Security
Income (SSI) and Medicaid programs. However, public monetary benefits provide only for the
bare necessities such as food, housing and clothing. As you can imagine, these limited
benefits will not provide your 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 the benefit of a recipient
of SSI and Medicaid, as long as certain requirements are met.
When should a Special Needs Trust be established?
Generally, a Special Needs Trust should be established no later than the beneficiary’s 65th
birthday. If you have a disabled or chronically ill beneficiary, you may want to consider
establishing the Special Needs Trust at an early age. One benefit of having the Trust in place
is that if the disabled beneficiary becomes the recipient of funds such as gifts, bequests or a
settlement from a lawsuit they can immediately be transferred to the Special Needs Trust
without affecting that individual’s eligibility for government benefits.
Who can establish a Special Needs Trust?
While Special Needs Trusts are typically established by parents for their disabled children, any
third party can establish a Special Needs Trust for the benefit of a disabled beneficiary. It is
important to seek the assistance of competent counsel when creating a Special Needs Trust
because a poorly drafted Trust can easily be subject to “invasion” by the government agencies
that provide benefits. Our law firm has the experience and the expertise to establish effective
Special Needs Trusts for anyone who wishes to provide for a disabled beneficiary.
Our family is wealthy. Do we still need to create a Special Needs Trust?
Yes, you should still establish a Special Needs Trust to protect your disabled beneficiaries from
potential creditors. For example, if your disabled beneficiaries are ever sued in a personal
injury action, the assets in the trust would not be available to the plaintiffs. Furthermore,
because the funds in the Special Needs Trust are not countable as available assets for
purposes of determining government benefit eligibility, more of your money can be used for
those supplemental expenditures that will allow your disabled beneficiary to enjoy a higher
quality of life. Otherwise, much of your assets will be used to pay for private care benefits that
are extremely expensive and can drain even significant sums of money over time.