The purpose of a special needs trust is to provide financial assets for your disabled spouse, parent or child’s future care and well being, while maintaining their eligibility for government benefits.
Under current federal law, an individual with more than $2,000 in assets is disqualified from most needs-based government benefits. State assistance programs may also be based on need. If your disabled spouse, parent or child were to receive an inheritance from you directly, it’s highly probable that the inheritance would disqualify your child from receiving needed benefits. Do not leave assets directly.
With a special needs trust, however, you leave assets to the trust. The trust is managed by a trustee, who then can use trust assets on your loved one’s behalf. Special needs trust requirements are stringent, so it’s important that you consult with an experienced attorney to set one up.
In a properly-structured special needs trust, the trust holds title to the property for the benefit of the disabled child or adult. The assets in the special needs trust can then be used to provide for the needs of the disabled individual, as well as to supplement benefits received from government assistance programs.
For example, trust assets can be used for:
- transportation, including purchase of a vehicle
- training, rehabilitation or education programs
- medical, dental and eyesight expenses
- insurance premiums
- companion/home health aide expenses
- items to enhance quality of life/self esteem
In order to retain eligibility for government benefits, it’s important that well- intentioned family members, such as grandparents, understand that their will should bequeath assets to the special needs trust, and not directly to the disabled individual.
You may ask questions in the comments or contact me privately: