With a special needs trust, you don’t have to worry about losing government benefits if you are the beneficiary of financial gifts or settlements.
Special needs trusts (also known as “supplemental needs” trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements, or other funds and yet not lose his or her eligibility for certain government programs. Such trusts must be carefully drafted so that the funds are not assets to the beneficiary in determining eligibility for public benefits. As the name implies, special needs trusts are not designed to provide basic support, but instead to pay for needs that cannot be paid for by other sources, including public assistance funds. Special needs can include medical and dental expenses, not otherwise covered, annual independent check-ups, necessary or desirable equipment (such as specially equipped vans), training and education, insurance, transportation, and essential dietary needs.
Often, special needs trusts are created by a parent or other family member for a child with special needs. Such trusts also may be set up in a Will as a way for an individual to leave assets to a disabled relative. In addition, the disabled individual can often create the trust himself, depending on the program for which he or she seeks benefits. These “self-settled” trusts are frequently established by individuals who become disabled as the result of an accident or medical malpractice and later receive the proceeds of a personal injury award or settlement.
A family or person that wishes to benefit an individual under a disability or chronic illness will be well advised to utilize the services of an attorney that specialized in special needs issues.
Contact Bowers and Associates for an appointment to discuss utilizing a special needs trust.