A Special Needs Trust can be established for a person with disabilities from birth, afflicted thereafter, or resulting from an injury in order to provide for supplemental needs without forfeiting benefits provided by Social Security, Medicaid or other sources that may be need based. The disabled person can receive gifts, inheritances and personal injury settlements into a Special Needs Trust without loss of entitlement to other benefits. The funds must come from third parties and be subject to the control of a trustee capable of properly investing the funds and administering the trust for the benefit of the disabled person.
While trust funds are generally intended to be for therapies, medical care, disability aids and other goods and services related to the beneficiary’s disability, with proper justification and documentation they can also be used for enhancing the beneficiary’s life and living conditions, like adaptations to vehicles and residences, trips, and improved housing. Although trust assets cannot be used for “luxuries,” a hot tub could also be a therapeutic aid for a disabled person.
Trust funds can also be used for estate planning and burial expenses. On the disabled person’s death, the balance in the trust may be subject to a claim for reimbursement from governmental entities for the cost of the services they provided, with the remaining balance payable to the beneficiary’s heirs or as provided in the trust.
Anyone looking to provide for a disabled person or someone receiving compensation for a disabling injury should evaluate whether a Special Needs Trust would be beneficial to prevent the loss of other benefits or entitlements that may be or become available.
A Special Needs Trust can be a lifesaver for a disabled person and a great relief for caregivers, but the rules are complex and experienced legal and financial advice is recommended. The attorneys at Brooks, Tarulis & Tibble, LLC have experience evaluating the needs and benefits of a Special Needs Trust, as well as creating and administrating them. Please contact us with any questions.
