For families of people with disabilities, a special needs trust (SNT) allows that individual to have extra funds for additional needs, without losing Medicaid and other government benefits. Because those benefits often have strict limits on how much money recipients can have, caring relatives may wonder: how can I leave money in my will for my loved one, without directly impacting these benefits?
Fortunately, special needs trust funds are intended to supplement government assistance rather than replace it altogether. SNT funds can pay for things like travel, therapy, education, equipment, and more. The rules surrounding SNTs can be complicated, so anyone looking into one should consult a qualified professional in this area to ensure that the funds will be managed correctly.
The attorneys at Handin Law can work with you to explain how special needs trusts work and whether your situation requires one.
What Is A Special Needs Trust (SNT)?
SNTs are legal documents that help people with disabilities afford necessities or comforts that are not provided for by government assistance. They are not, however, intended to replace these government benefits, which can be crucial to the recipient’s survival and overall well-being. Government-funded benefits such as Medicaid and Supplemental Security Income (SSI) provide for medical care, food, clothing, and housing.
Because these programs are “needs-based,” if someone’s resources exceed a certain monetary limit, they may be disqualified from receiving further assistance. This is where an SNT helps fill that gap, filling needs and enhancing overall quality of life without having to lose that assistance.
What Are The Benefits Of A Special Needs Trust?
A parent, sibling, or other caregiver may want to consider an SNT for the following reasons:
Financial Security
Some disabilities that require ongoing care can concern parents as they age. They may wonder how their child will manage without additional resources beyond the bare minimum, once they themselves require additional care. Special needs trusts are intended to supplement government assistance, providing financial resources for many years to come.
Protection Of Assets
It’s a sad but unfortunate fact that people with certain disabilities face higher risks of financial abuse. With a special needs fund, a responsible trustee can oversee how the funds are spent and ensure they are protected.
A Chance To Support A Charity
A special needs fund ensures that a designated amount of money can be given to an organization of choice. This may be in the event that the beneficiary dies before having the chance to access the funds. Nonprofit organizations that provide essential services for the disabled relative are one example of where the money can go.
Types Of Special Needs Trusts
The most common types of SNTs are a first-party special needs trust and a third-party special needs trust.
What is the difference?
First-Party Special Needs Trust
This type of trust is often established using resources that belong to the individual with the disability. This is usually in the event of receiving a settlement after an injury that caused the disabilities in the first place.
Third-Party Special Needs Trust
These trusts are created by family members, usually parents or siblings. In all likelihood, the parents will be deceased before the child, in which case the supplementary funds will help facilitate the care and comfort they already receive.
What Can Special Needs Trusts Cover?
Parents often cover many additional expenses that aren’t considered “essential,” but still make life easier or more enjoyable. This is true in many families, whether disabilities are present or not.
Some examples of what an SNT may cover include the following:
- Medical or dental care that isn’t already covered by Medicaid, such as medication or therapies
- Education or training expenses
- Recreational activities or vacations
- Mental health counseling
- Wheelchairs or specially equipped vehicles
- Costs associated with a new home, such as furniture and repairs
- Transportation services, such as bus or subway passes, Uber, Lyft, etc.
- Entertainment and recreation, such as camps, social events, or sporting equipment
- Computers or other appliances
- Cell phones and phone bills
- Starting a business (which may include payment for a business attorney)
- Payments for an at-home caregiver
- Health insurance
- Burial expenses
Create A Special Needs Trust In South Florida
Life is full of unexpected moments. They can’t always be prevented, but it helps to be prepared. One way to do that is to meet with a will and trust attorney to ensure that your loved ones are provided for long after you are no longer able. At Handin Law, our legal staff specializes in a variety of legal services in Coral Springs, such as estate planning, creating wills and trusts, starting businesses, and much more.
Some things are too complex to leave to chance; someone with a wealth of legal knowledge can save you time and headaches down the line.
Plan their future, protect their benefits, and give your family peace of mind. To schedule a consultation, call Handin Law at 954-796-9600 today.