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Special Needs Trust: Learn the Basics
If you have a child with special needs that hinders them from managing their own affairs, you may want to establish a Special Needs Trust (also known as a Supplemental Needs Trust for them, especially if you’re planning to leave them money or property. In this event, it’s critical that you plan carefully. If not, you could jeopardize their ability to receive Supplemental Security Income (SSI) or Medicaid benefits. However, the good news is that by setting up a Special Needs Trust as part of your estate plan, you could avoid potential problems.
What is a “Special Needs Trust”
A Special Needs Trust is both a legal arrangement and fiduciary relationship that allows a person with special needs to receive assets without reducing their eligibility for public assistance disability benefits provided by Social Security, SSI, Medicare or Medicaid. In a fiduciary relationship, a person or entity acts on behalf of another person to manage assets in the trust.
So, in short, the Special Needs Trust, or Supplemental Needs Trust, is overseen by the fiduciary who controls how the assets are used for the benefit of the individual with special needs. Most importantly, it provides the fiduciary with instructions on how to administer the Trust so that it does not violate the resource and income provisions of Social Security, SSI, Medicare or Medicaid.
Why Would Someone Need a Special Needs Trust?
If you are a parent of a child with special needs, then you are probably all too familiar with the costs that are associated with your child’s care. As a parent, there is nothing more important than ensuring that your child is provided for in the manner you wish. This is even more important when your child is not able to provide or oversee their own personal care.
While it’s important as a parent to ensure that your child is well provided for, as a special needs parent it’s even more critical that you do not place their disability benefits (like Medicaid or SSI) in jeopardy. By establishing a Special Needs Trust, you can ensure that your child will still receive their benefits while a fiduciary can oversee the trust and be in charge of spending the money on your loved one’s behalf. Since your child will have no control over how the money is spent, the Trust will not affect benefits like SSI or Medicaid.
Important Considerations to Make
When it comes to establishing a Special Needs Trust, the most important consideration to make is who should be the fiduciary of the Trust. Since this person will be controlling how the assets are spent for your child, it is vital that this person is someone who you completely trust.
Why You Should Work with a Qualified Attorney
By working with a Special Needs Trust attorney, you are ensuring that the Trust is set up correctly so not to affect other benefits received by your loved one. There are multiple considerations to take into account when governmental benefits are involved and a Special Needs Trust attorney can help make sure that your child’s benefits are not jeopardized while also making sure that they are protected.
If you have questions, or are interested in setting up a Special Needs Trust, please contact us or complete the brief form below to send a message to our legal team.