FAMILY ESTATE PLANNING

Protecting Your Assets And Your Legacy

SPECIAL NEEDS TRUST

Adults and children with special needs require special planning. Leaving money outright to those individuals may disqualify them from eligibility and qualification for government benefits needed for their care.

A Special Needs Trust is a specialized trust that is specifically designed to hold assets in a way that allows the beneficiary (the person in need of care) to preserve or obtain need-based government benefits such as SSI or Medicaid.

Restrictions

In Florida, a valid Special Needs Trust is limited to individuals age 65 years or younger who meet certain qualifications, and requires specific provisions not found in standard trusts. For example, the beneficiary of a Special Needs Trust (the person receiving special care) cannot be the grantor (creator) or trustee (administrator) of the trust.

Instead, a Special Needs Trust is created by a parent or grandparent who wants to provide for the care of a loved one, and the trust assets are managed by an independent, professional trustee. The trust assets are then used to maintain and increase the beneficiary’s quality of life by purchasing products or services that are not covered by SSI or Medicaid.

Importantly, assets placed into a properly designed Special Needs Trust do not count for Medicaid and SSI eligibility, and an unlimited amount of assets may be placed in the trust.

When is a Special Trust Needed?

  • A person has a disability requiring lifelong care;
  • A Medicaid recipient receives an unexpected windfall of money;
  • A parent with disabled child doesn’t want to disinherit their child;
  • A Medicaid applicant earns too much income to qualify for Medicaid.

Be Cautious

Depending on the type of Special Needs Trust, money remaining in the trust may need to be paid back to the government for services and care provided, or it may be permitted to go to other family members or charities.

As with any other legal document, using a DIY or pre-printed special needs trust is risky and you should always consult with an estate planning attorney to ensure your specific goals and all legal requirements are met.

If you have a family member or loved one that needs supplemental care due to special needs, please contact me today to learn more about how to provide for that person.