What is a special needs trust?
A special needs trust is established to provide for the care and needs of a disabled individual without jeopardizing the disabled person’s eligibility for government benefits such as Supplemental Social Income (SSI) and Medicaid.
A first-party or self-settled special needs trust is established with the asset’s owned by the disabled person. A third-party special needs trust, on the other hand, is established with assets owned by a person other than the disabled person, and the disabled person is the beneficiary. For example, special needs trusts are often created by a parent or grandparent who wishes to provide for a disabled person after his or her death.
There are two types of special needs trusts available:
- A General Special Needs Trust is created as the primary or sole source of the disabled beneficiary’s care. It is important to note that a General Special Needs Trust is viewed as an available resource for the beneficiary which may bar the beneficiary’s eligibility for government assistance.
- The second, and most common type of special needs trusts, is a Supplemental Care Special Needs Trust. These trusts are created as a secondary source of benefits for the disabled beneficiary after Supplemental Social Income (SSI) and Medicaid benefits have been exhausted.
What can a special needs trust provide?
The term “special needs” encompasses not only medical and healthcare services and products that may benefit a disabled beneficiary, but also a wide range of related services and “quality of life” options that may be customized to the specific circumstances of the beneficiary. Some examples include:
- medical supplies and equipment;
- health insurance premiums;
- life insurance premiums;
- medical and dental care not paid by other sources;
- additional service providers, such as domestic and personal assistants;
- additions or renovations to the beneficiary’s residence;
- cost of communal or assisted-living arrangements; and
- entertainment and hobbies.
A special needs trust does not cover the following:
- Cash given directly to the beneficiary for any purpose;
- food or groceries;
- rent or mortgage payments;
- property taxes;
- homeowner’s insurance
If you have any questions about maintaining the special needs trusts for your loved ones, give us a call. We can help ensure that your loved one is provided for without jeopardizing their eligibility for disability benefits. Consulting with an experienced estates & trusts attorney. We are located in beautiful Coral Gables and can be reached by calling (786) 837-6787 or by emailing us to schedule a consultation with you.
*Disclaimer: This blog post is not intended to be legal advise. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*