Navigating the world of trusts and government benefits for those with special needs can be a complex and confusing task requiring attorneys, accountants and a lot of patience. This complexity can be especially true when trying to ensure a loved one with permanent physical or mental disabilities is cared for after you pass away One of the ways that you, or a loved one, can receive the financial help needed without jeopardizing eligibility in needed programs is with an SNT, Special or Supplemental Needs Trust. This is a secure way to provide for your loved one’s future.
What Are They?
In the simplest of terms, Special Needs Trusts are trusts set up to help someone with special needs, such as mental or physical disabilities, pay bills without earning an income. The assets in the trust can pay these bills without the beneficiary losing eligibility for income-based governmental programs such as Medicaid or Medicare, Social Security Disability payments and others. In essence, the trust holds assets used to cover some expenses not covered by public assistance. Because the trust and not the individual control them, these assets do not count as qualifying income as long as they are not used for some shelter and food purchases. This is especially important so that they do not lose any benefits wile still having money from the trust to support them throughout their life.
Who Sets Them Up?
Since assets of the beneficiary can count towards repayment rules for some forms of disability assistance, a Supplementary Needs Trust is set up by a third-party in most cases the parents or caregiver of a disabled individual. The trustee is someone who manages the trust for the beneficiary and is generally a separate party from those who set it up, such as an attorney or a caregiver. Assets put into these types of trusts are irrevocable, so funds put aside in an SNT for the benefit of another cannot be used to pay off debts if you file bankruptcy or if they are involved in a lawsuit. Since disabled people are often the target of fraudulent lawsuits and con artists, having an SNT is crucial to their safety and financial future. The protection provided by a SNT gives everyone please of mind.
What Are the Benefits?
Supplemental Needs Trusts help designate funding for specific expenses in the beneficiary’s life as stipulated by the party opening the trust. This structure means that parents can place inheritance money in an SNT to ensure that their child’s caretakers and bills are paid now and into the future, regardless of how long the parents live. Since the funds cannot be forfeited in a lost lawsuit, it is also a way to ensure that your disabled loved ones are given the proper inheritance, that it cannot be sued away by others, and that it is being used to pay for items that you stipulate.
Setting up a Supplemental Needs Trust provides all the legal and financial security that your loved one needs to be cared for in the manner you see fit. Setting this up now is imperative to your futures.