Special Needs Trusts for Persons with Disabilities
A special needs trust is one important element in special needs planning if you have a loved one with disabilities. If you have a loved one who has a developmental disability or some other disability, then you can use a special needs trust to ensure that the inheritance you desire to leave him or her will used for his or her benefit. These trusts are frequently called “supplemental needs trusts” as well.
There are two primary purposes for a special needs trust. The first purpose is to keep assets for the benefit of your disabled loved one from counting as his or her own assets which could disqualify them for programs of government assistance, such as SSI, Medicaid, as well as subsidized housing and vocational rehabilitation benefits. The second purpose -- and the one that brings peace of mind to the family – is that the person with disabilities will be able to have extra care (supplemental care) over and above what the government provides. Not only will your disabled loved one live an enhanced life, but he will never have to be alone because the special needs trust can pay for caregivers for a life-time.
Special needs trusts can be written into your Will or your revocable living trust. Or, you can establish a special needs trust, now, as a stand alone trust outside of your Will or revocable living trust. These stand alone trusts allows grandparents or siblings to contribute directly to the trust or specifically name the trust in their own estate plans to provide more funds for the person with disabilities.
Not only persons with disabilities can benefit from having the protection of a special needs trust. Older adults can also benefit from a special needs trust. If you are either leaving an inheritance to an aging parent because you have no descendants of your own, placing a special needs trust into your estate plan documents will prevent any possibility of jeopardizing an aging parent’s eligibility for government assistance.