Planning for a Loved One with Special Needs

Planning for a Loved One with Special Needs


In general, a trust is a legal device whereby property of some sort (real estate, cash, tangible personal property, etc.) is managed by a person, termed the Trustee, for the benefit of certain other people, termed the beneficiaries.  A special needs trust, also called a “supplemental needs trust,” is a specific kind of trust created for the benefit of individuals who have physical or mental disabilities.

Often people with disabilities need to qualify for various types of governmental benefit programs.  If the disabled individual has too many assets, or inherits too many assets upon the death of a loved one, or is awarded too many assets outright via a large personal injury settlement, then the disabled individual may lose their benefit eligibility.  A special needs trust is an arrangement that permits those assets to be held in trust for the benefit of the disabled individual in a way that will allow continued eligibility for governmental benefit programs. 

The trust agreement for a special needs trust must be drafted very carefully.  The agreement will need to include specific terminology to ensure that the governmental agencies that administer benefit programs, such as Supplemental Security Income (SSI) or Medicaid, cannot consider the assets in the special needs trust as reachable by the disabled beneficiary. 

A pooled trust is a type of special needs trust that is managed by a nonprofit organization. These nonprofit organizations pool the money from multiple families and invest it.  Each beneficiary still has his or her own separate account and his or her own Trustee, chosen by the nonprofit organization.  The funds in each beneficiary’s account are used solely for the benefit of that beneficiary.  Advantages of a pooled trust include professional investment management rather than relying upon a family member with little financial knowledge, and more reasonable fees than may be available for professionally-managed individual trust accounts.

How can the beneficiary access the special needs trust?

Having the trustee directly give your loved one money could disqualify him or her for government benefits. Instead, the trustee can use the trust assets to purchase necessities for your loved one. The trustee can buy services and products, like personal care attendants, vacations, home furnishings, medical and dental care, education, vehicles, physical therapy, and even recreation.

If you or a loved one may benefit from learning more about special needs trusts, please call our office at 888-822-8778 to see how we can help.


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