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What Is A Special Needs Trust?

What Is A Special Needs Trust?

Wrongful Death Lawyers

According to a special needs trust lawyer from our friends at W. B Moore law, one of the most challenging questions comes from those who have a family with disabilities. Who will take care of them when they pass? It is a daunting worry when you don’t know the answer, and it is especially pertinent to our own wrongful death lawyers who often see loved ones with special needs in trouble because their family did not have an estate plan in place in case of an emergency.

You have to plan for so many things that you may not know what to do. Thankfully, there is a financial planning solution to help families and caregivers of those with special needs. This plan provides supplemental funding to cover the expenses of the individual with special needs without impacting government eligibility. Things like Medicaid will not be lost or even travel expenses.

How Do Special Needs Trusts Work? 

Needs-based government benefits, like Medicaid, have specific income and asset requirements. If the individual receiving them surpasses that, then they can be disqualified from receiving the assistance they need. If you have a loved one with a disability it can be hard to support them financially without impeding their ability to receive government benefits.

When you decide on a trust, it allows you to allocate funds and other assets to it. This way, you will be able to provide help without them counting towards personal income. Just like other trust accounts, you will need a grantor, a trustee, and a beneficiary.

The funds in these trusts can be used for anything the beneficiary chooses. Most often they are used for medical expenses, home care, transportation, and housing costs. While the government does typically pay for some of these expenses, they often don’t cover the full amount. While it would be easy for you to afford the difference, if someone who relies on these services did, they may no longer qualify for the benefits at all. A special needs trust, or SNT, allows them to fill those gaps without worry.

How Trust Assets Can Be Used 

Trust assets can be used for just about anything that is not illegal or contrary to the terms of the trust. The primary purpose of a special needs trust is to enhance the quality of life of the beneficiary. In general, the trust funds can be used to pay for:

  • Caregiving, such as a home nurse or therapies
  • Experiences such as travel or even concerts
  • Services like a cell phone, internet, or a cleaning service
  • Pet care like pet food and veterinarian care
  • Computers, clothing, or new furniture

Using a trust to pay for food or shelter is often more complicated as it generally triggers a reduction in social security benefits. However, despite it being tricky it can still be used as there are exceptions to the rules. You would have to consult a lawyer before using it for such things, to know how they would impact things.

Having a loved one need a trust fund is hard, especially when they have special needs. Talking to a lawyer is often in your best interests as they can answer any questions you may have.