Trust Services

Special Needs Trusts and other services

The desire to protect your, a family members or a client's eligibility for government benefits shouldn't make you avoid taking a legal settlement you deserve or a inheritance. With a correctly designed and appropriately funded special needs trust,  eligibility for government benefits will be unaffected.


We specialize the drafting and design of special needs trusts for individuals on means-tested benefits, like Medicaid, Food Stamps (SNAP) and Social Security Disability Insurance (SSDI). Importantly, if you, a family member, or a client receive government benefits and are facing down the possibility of receiving a legal settlement or an inheritance, please contact my office for a free consultation. 


Additionally, we also provide Qualified Settlement Fund (468B) Trust design and standard spendthrift trust design. For additional information, please feel free to contact us.

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Special Needs Trusts FAQs

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What is a Special Needs Trust?

A special needs trust (also referred to as a supplemental needs trust) is "a trust established to provide supplemental income for a disabled beneficiary who is receiving or may be eligible to receive government benefits. Blacks Law Dictionary. Simply put, assets placed into a special needs trust will not jeopardize your government benefits. 


This is because under federal law,  if assets are placed in this trust, they are not counted under resource counting rules for government benefits. See 42 U.S.C. 1396p(d)(4)(A). 

Who needs a Special Needs Trust?

Anyone who is currently or anticipates receiving means-tested (income and asset dependent) benefits, who is about to receive money in excess of those means tested levels should consider a special needs trust. 


You should consult with an attorney who deals with special needs trusts before making the decision, as there may be low cost alternatives (i.e. ABLE accounts or Pooled-Trusts) which may better suit your situation. 

What is required to set up a Special Needs Trust?

The following are required to set up a special needs trust:

  1. The beneficiary must be under the age of 65 and disabled (as defined under federal law);
  2. the trust is established for the sole benefit of the disabled individual through the actions of the individual, a parent, a grandparent, a legal guardian, or a court; and
  3. the trust provides that the State(s) will receive all amounts remaining in the trust upon the death of the individual up to the amount equal to the total medical assistance paid on behalf of the individual under a State Medicaid plan. 

Who may set up a Special Needs Trust?

As mentioned above, a special needs trust may be established  through the actions of the individual, a parent, a grandparent, a legal guardian, or a court. 


Importantly, prior to 2016, the disabled individual could not set-up their own special needs trust. 

What can a Special Needs Trust pay for?

A special needs trust is meant to supplement or enhance the quality of life of the beneficiary. Governmental benefits are meant to provide for essentials, like medical care, food, clothing, and shelter. Payments from the trust must supplement and not pay for these essentials. 


Some examples of what a special needs trust may pay for include, but are not limited to: 

  • Medical and Dental expenses not covered; 
  • Special Equipment like wheelchairs or specially equipped vans; 
  • Travel, which can include reasonable costs of a necessary companion; 
  • Recreation and Entertainment;
  • Electronic equipment and appliances, and computers; 
  • A vehicle;
  • Insurance; and 
  • Prepaid burial expenses. 


The following are some good resources that can help you determine what a trustee can pay:

What happens to a Special Needs Trust upon death of the beneficiary?

Every Special Needs Trust is required by law to reimburse State(s) Medicaid Plans amounts up to the amount equal to the total medical assistance paid on behalf of the individual under a State Medicaid plan.  This means if assets remain in the trust at the time of the beneficiaries death, those assets must first go to reimburse the State(s) Medicaid plan before a distribution to another would be allowed. 

How much does a Special Needs Trust cost?

The initial cost associated with the drafting of a special needs trust can vary greatly with some practitioners charging several thousands of dollars. And it is important to understand that costs will also vary based on the complexity of your situation. 


The costs associated with administering the trust can quickly add up. Generally, there will be a trustee fee, a investment management fee, an accounting fees, and taxes. Taxes and the accounting fees are generally unavoidable, but if a family member can serve as trustee and you can place the money with a local bank, you may be able to save considerably.

Can a Special Needs Trust pay for housing?

This is a tricky question. Paying for housing directly will impact your benefits; If the special needs trust pays the mortgage or rent, your benefits will be reduced. 


Your Special Needs Trust can own a home, but remember all of the trust property is subject to a Medicaid sweep upon the death of the beneficiary. This would include a home, if owned by a Special Needs Trust. 

Do Special Needs Trust pay taxes?

Yes. The Trust will have to file an annual tax return and pay taxes on any earnings. 

Can assets be added to a Special Needs Trust after it has been established?

Yes, until the beneficiary reaches the age of 65. After this time no assets may be added to a Special Needs Trust. This restriction does not stop a Special Needs Trust from earning interest or value on investments, or receiving predetermined annuity payments from a structured settlement. 

Disclaimer

The information you obtain at this site is not legal advice. You should consult an attorney for individual advice regarding your own situation.  If you have specific questions, please contact us.