A Special Needs Trust is a legal instrument specifically designed to enhance the quality of life for individuals with disabilities while preserving their eligibility for crucial government benefits. This trust serves as a powerful tool to secure the financial future of your loved one and ensure that their unique needs are met in a thoughtful and sustainable manner.

What is a Special Needs Trust?

A Special Needs Trust is a type of trust that is designed to provide for the needs of a person with a disability while also preserving their eligibility for government benefits such as Medicaid and SSI. The trust is typically created by a parent, grandparent, or legal guardian of the person with a disability, and is managed by a trustee who is responsible for making distributions from the trust for the beneficiary’s benefit.

Who can benefit from a Special Needs Trust?

1. Individuals with Disabilities: A Special Needs Trust is ideal for individuals with physical, cognitive, or developmental disabilities who rely on government assistance programs such as Supplemental Security Income (SSI) or Medicaid. By creating a trust, you can provide for their supplemental needs while safeguarding their eligibility for vital benefits.
2. Parents and Guardians: Parents and guardians of individuals with special needs are key beneficiaries of a Special Needs Trust. By establishing a trust, you can ensure your child’s ongoing care, support, and quality of life. The trust provides a vehicle for managing assets, securing government benefits, and facilitating a seamless transition of care in the future.
3. Extended Family Members: Siblings, grandparents, and other family members who wish to support an individual with special needs can also benefit from a Special Needs Trust. By contributing to the trust, they can ensure the individual’s financial stability, well-being, and access to essential services and resources.

Key benefits of a Special Needs Trust:

1. Asset Protection: The trust shields the individual’s assets from being counted towards eligibility requirements for means-tested government programs. This protection ensures that they can continue to receive vital benefits while utilizing the trust assets to enhance their quality of life.
2. Continuity of Care: A Special Needs Trust establishes a framework for ongoing care and support, outlining the individual’s specific needs, preferences, and desires. This continuity of care plan ensures that their well-being is prioritized, even in the event of parental or guardian incapacity or death.
3. Supplemental Services and Enjoyment: The trust allows for the use of trust assets to provide supplemental services and support beyond what government benefits cover. This can include medical and dental expenses, therapies, education, travel, recreation, and other enriching experiences that enhance the individual’s quality of life.

How does a Special Needs Trust work?

When assets are transferred into a Special Needs Trust, they are no longer considered to be owned by the beneficiary for the purposes of determining their eligibility for government benefits. This means that the assets in the trust can be used to provide for the beneficiary’s needs without affecting their eligibility for government benefits.

The trustee of the Special Needs Trust is responsible for managing the trust assets and making distributions to the beneficiary for their benefit. The trustee must also ensure that the distributions are made in a way that does not affect the beneficiary’s eligibility for government benefits.

There are several different types of Special Needs Trusts (SNTs) that can be established, depending on the specific needs and circumstances of the beneficiary and their family. Here are some of the most common types of SNTs:

1. Third-Party Special Needs Trusts

A third-party Special Needs Trust is created by someone other than the beneficiary, such as a parent, grandparent, or other family member. This type of trust is funded with assets that do not belong to the beneficiary, such as gifts or inheritances from family members. A third-party SNT can be established during the lifetime of the person creating the trust, or it can be set up in their will to take effect upon their death.

2. First-Party Special Needs Trusts

A first-party Special Needs Trust, also known as a self-settled SNT, is established with assets that belong to the beneficiary, such as a personal injury settlement or an inheritance. This type of trust is often used when the beneficiary receives a large sum of money that would disqualify them from receiving government benefits. By placing the assets in a first-party SNT, the beneficiary can continue to receive government benefits while still having access to the trust funds for their needs.

3. Pooled Trusts

A Pooled Trust is a type of Special Needs Trust that is managed by a nonprofit organization. The trust assets are pooled together with the assets of other beneficiaries, and the nonprofit organization serves as the trustee. Each beneficiary has a separate account within the trust, and the trustee is responsible for managing the investments and making distributions for the beneficiary’s benefit. Pooled trusts are often used when the beneficiary does not have enough assets to establish a standalone trust or when the family does not want to serve as trustee.

4. Testamentary Special Needs Trusts

A testamentary Special Needs Trust is established in a person’s will and takes effect upon their death. This type of trust can be a third-party trust or a first-party trust, depending on the source of the assets. A testamentary SNT can be useful for parents or other family members who want to provide for a loved one with a disability after their own death.

5. Special Needs Trusts for Military Veterans

A Special Needs Trust can also be established for a military veteran with a disability. This type of trust is often used to protect the veteran’s eligibility for VA benefits while still providing for their needs. The trust can be established by the veteran, a family member, or a court.

It’s important to note that each type of Special Needs Trust has its own requirements and restrictions, and it’s important to work with an experienced attorney to determine which type of trust is most appropriate for your situation.

At our firm, we specialize in creating tailored Special Needs Trusts that address the unique circumstances and goals of each family. Our compassionate and knowledgeable attorneys work closely with families to develop comprehensive estate plans that ensure financial security, preserve government benefits, and protect the future well-being of individuals with special needs.

By choosing our team of dedicated professionals, you can expect personalized attention, expertise in disability laws and regulations, and a commitment to supporting your family every step of the way. Contact us today to schedule a consultation and discover how a Special Needs Trust can empower your family to provide a lifetime of care and support for your loved one with special needs.