Caring for a loved one with special needs is a life-long commitment. Parents of children with Down syndrome or severe autism need all the help they can get in finding resources to help their children reach their potential and become as independent as they possibly can. As difficult as this is, the most difficult thing a parent of a special needs child faces is the thought of what will happen to their child after they are no longer around to care for them. Likewise, a husband or wife who is caring for a spouse with dementia or Alzheimer’s worries about what will happen if they die before their incapacitated spouse.

If you are in one of these situations, you owe it to yourself and your loved one to learn about the options available to you through a Special Needs Trust. The attorneys at Ross & Shoalmire, P.L.L.C. understand the fear you are facing as you care for a loved one with special needs, and they have solutions to give you peace of mind. 

Types of Special Needs Trusts

Through a supplemental care Special Needs Trust, you can make sure that money is set aside to enhance your loved one’s quality of life. The trust will be managed by the appointed Trustee. Money from a Special Needs Trust cannot be used to pay for basics such as rent, food, or utilities or given to the beneficiary as cash. The funds may only be used to pay for things beyond their basic needs. 

Two types of Special Needs Trust include:

  • First-party trust. When the person with special needs has assets in their own name—such as from an inheritance, legal settlement, or insurance payout—they can be put into a first-party trust so that he or she doesn’t have direct access to the money, and the assets won’t affect their ability to qualify for government assistance. However, a first-party trust must contain a payback provision, meaning that any money left in the trust after the beneficiary passes away must be paid back to the state as reimbursement for public benefits.
  • Third-party trust. A family member or friend can set up a third-party trust either during their lifetime or after their death through a Will. These trusts can be funded in a variety of ways, including donations from other family members. They do not require a payback provision, and the person who established the trust can determine how any remaining funds should be disbursed upon the beneficiary’s death. Like a first-party trust, assets in a third-party trust do not count against the beneficiary when applying for government benefits.

Establishing a Special Needs Trust is not a do-it-yourself project. There are many federal and state laws, as well as administrative rules, which must be carefully followed when setting up and running this type of trust. Our team can guide you through the process to ensure that the assets benefit the disabled individual.

What a Special Needs Trust Can Fund

The purpose of a Special Needs Trust is to enhance the beneficiary’s quality of life. If the funds are used towards food or shelter, they can be counted as income and will disqualify the person from receiving Medicaid or Supplemental Security Income (SSI). 

At the Trustee’s discretion, the following expenses may be covered by a Special Needs Trust:

  • Special equipment
  • Medical and dental expenses not already covered by insurance
  • In-home caregivers or companions
  • Training and education
  • Rehabilitation
  • Summer camp
  • Entertainment activities, such as movies, plays, concerts, and athletic events
  • Transportation, such as a car, bus pass, or rideshare membership
  • Travel and vacations
  • Help starting a business

Working with our skilled Special Needs Trust legal team, you can ensure that your loved one will have access to these types of enrichment programs while remaining eligible for public assistance.

Contact Us Today to Get Started

It’s never too soon to make plans to protect a loved one with special needs. Call for a free phone consultation to find out how we can help. With four offices throughout Northeast Texas, we are conveniently located for clients from Dallas to Little Rock.