From the Blog

Get to Know Special Needs Trusts

Posted on September 09, 2019

Trust assets can be used for a variety of helpful and enriching benefits, all while not jeopardizing valuable government assistance.

Caring for a family member or friend with a disability or special needs can difficult to navigate without expert help and the right plan. Whether due to an accident or mental disability, a special needs trust can help enrich your loved one’s life while not jeopardizing benefits that can be a significant source of income and health insurance.

What Is a Special Needs Trust?

A special needs trust, sometimes called a supplemental needs trust, is a legal arrangement where one person or entity – the trustee – is charged with protecting the interest and assets for the benefit of another – the beneficiary. The trust essentially allows an individual with a disability or special needs to benefit from the income and principal of the trust without reducing their eligibility for government assistance such as Supplemental Security Income (SSI) or Medicaid.

The use of a special needs trust can protect against the reach of creditors, and it provides protection for a beneficiary who may be vulnerable, susceptible to undue influence or unable to manage money independently. But most importantly, a special needs trust stretches each dollar contributed to the trust and allows the beneficiary to be cared for at a higher level of care without jeopardizing the beneficiary’s benefits.

How Can the Assets Be Used?

Trust assets can be used to buy a wide variety of goods and services to assist the beneficiary and enrich his or her life. Common uses include personal care attendants, vacations, home furnishings, out-of-pocket medical and dental expenses, education, recreation, vehicles and physical rehabilitation.

Choosing the Right Trustee

Given the complexity and longevity of administering a special needs trust, it’s important to consider the best-qualified person or a corporate trust company to serve as trustee. Properly managing a special needs trust means understanding the disabilities of the loved one and communicating effectively with parents, caregivers or guardians, which can require a significant time commitment. The trustee must be able to prudently manage the assets held for the loved one’s benefit and understand the governmental regulations and how to work about them.

A special needs trust can help fund a lifetime of care for a disabled or special needs individual. While governmental support is designed to only provide for the very basic necessities, such as food and shelter, the funds in a special needs trust can be used for those many extras that will make the beneficiary’s life more rewarding and fulfilling. You may find it helpful to consult a special needs attorney, talk with your financial advisor, and read the full information guide below to learn more about special needs trusts and other strategies tailored for disabled or special needs individuals.

Read the full Special Needs Trusts information guide