Young Boy With Special Needs and His MotherA Special Needs Trust (SNT) is an important tool for providing supplemental income to a person who is collecting government benefits for a disability or illness. If there is someone in your life for whom you provide special care who will not be able to care for him or herself after you are gone, a Special Needs Trust might be something to consider. We take a look at the kinds of dependents who could benefit from a Special Needs Trust.

Potential Beneficiaries of Special Needs Trusts

In order to be eligible for need-based government benefits such as Medicaid and Supplementary Security Income (SSI), a recipient cannot have much money in their name. However, as their guardian and caregiver, you are permitted to spend your money on services and experiences to enhance their lives without affecting their eligibility. A Special Needs Trust is a way to set money aside so that this can continue after you are gone or are unable to care for them any longer because of your own incapacity or disability. You should consider this important tool if you have a dependent in one of the following categories:

  • Currently collecting benefits. If the person meets the Social Security Administration’s criteria for permanent disability and is already on Medicaid or SSI, he or she is a good candidate for a Special Needs Trust. Conditions such as Down syndrome, blindness, paraplegia, cerebral palsy, chronic mental illness, and developmental disabilities will usually automatically qualify the person for benefits.
  • Will likely need benefits in the future. If your child or spouse has a degenerative condition that is likely to get worse, you can establish an SNT to be prepared for the possibility that he or she will one day be unable to earn a living and will qualify for Medicaid or SSI after you are gone. If it turns out that they don’t get to this point, the Trust can be terminated, and the money distributed according to the terms of the Trust.
  • Currently on benefits, but may not need them in the future. A dependent who is currently on Medicaid or SSI because of a disability may not always be eligible. If the disability is temporary, or there are changes in treatment options, workplace adaptability, and technology, the person may one day be able to earn a living. There is no way to predict this eventuality, of course, but there is no harm in creating a Special Needs Trust now in case the person does remain on benefits. The Trust can always be terminated by the Trustee if it is not needed one day.

If you have concerns about a loved one’s ability to manage the money you hope to leave them, but they do not have special needs that will qualify them for government benefits, there are other Trust options available. An estate planning attorney can help you choose the best Trust to accomplish your goals, protect your assets, and help your beneficiary.

What Can Be Done With Money in a Special Needs Trust?

Your loved one with special needs will rely on government benefits for his or her day-to-day care. Leaving them even a small amount of money in a standard Will could immediately disqualify them from receiving this vital support. Through a Special Needs Trust, the Trustee you name will be able to pay for the things your loved one needs that are not covered by Medicaid or SSI, without affecting their eligibility. This might include travel, entertainment, assistive devices, therapies not already covered, education, computers and appliances, transportation, and more.

This Is Not a D-I-Y Project!

Choosing the appropriate Trust, funding the Trust, and operating the Trust requires the input of an experienced estate planning attorney. Trusts are subject to both state and federal laws, as well as administrative rules, that must be adhered to in order to function as intended. The Special Needs Trust attorneys at Ross & Shoalmire, PLLC are here to help you understand your options in Texas and Arkansas and to make the decisions that will most benefit your loved one with special needs.

 

Chris Parker
Chris Parker helps clients in TX and AR with medicaid and estate planning, asset protection, and probate.