If you have been providing care for a child or another loved one with special needs, you’ve no doubt thought about what will happen when you’re no longer able to give that care.
Of course, you can leave property to your loved one, but—as you are probably aware—doing so without some careful planning will almost certainly jeopardize his or her ability to receive benefits under the Supplemental Security Income (SSI) and Medicaid programs.
Unless you make the right legal arrangements, benefits simply won’t be available until the inheritance is used up.
A special needs trust allows you to protect your loved one’s government benefits while continuing to supplement his or her special needs.
When you’re done, you will know that your loved one’s benefits will be protected when you’re gone.
A Special Needs Trust will not help to protect assets that belong to a person with disability. Rather, it helps you protect that person’s eligibility for government benefits when you give that person assets as a gift or an inheritance.
When a person with a disability already owns assets—perhaps from a personal injury award, retirement plan, life insurance policy, or an unplanned-for inheritance—the owner can take steps to protect those assets.
Trusts that can help protect the assets that already belong to a person with a disability are “first-party” trusts that go by a variety of names, such as “first-party special needs trust,” “payback special needs trust,” “litigation special needs trust,” “Miller Trust,” “pooled SNT,” “(d)(4)(A) SNT,” and “(d)(4)(C) SNT.”
All of these first-party trusts must meet federal and state rules designed to keep applicants from sheltering their property in a trust in order to meet program eligibility requirements.
These trusts are also generally subject to “payback” rules that require that the state be reimbursed for medical expenses after the trust beneficiary dies. Because each state has very specific rules that constantly change, if you want to establish one of these trusts, you’ll need the help of an experienced special needs planning lawyer in your state.
Special Needs Trusts are designed to help families leave money to a loved one with a disability in a “third-party” special needs trust. The rules are a lot easier to follow in third-party planning than in first-party planning, simply because the government wants to encourage people to leave money for the benefit of their loved ones with disabilities.
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When it comes to Special Needs Planning, All Write Legal Doc’s has the experience to help you make the right choices.