Special Needs Trust

Understanding

Special Needs Trusts

Securing a Future for Loved Ones with Disabilities

A Special Needs Trust is a unique legal tool designed to provide financial support to individuals with disabilities while preserving their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). At [Your Law Firm Name], we can help you set up a special needs trust that ensures your loved one’s needs are met without jeopardizing vital public assistance programs.

What is a Special Needs Trust?

A special needs trust (also called a supplemental needs trust) is a trust that holds assets for the benefit of a person with a disability. The assets in the trust can be used to cover various expenses that are not provided by government assistance programs, such as:

• Medical or dental care not covered by insurance
• Education and vocational training
• Recreational activities and entertainment
• Transportation and vehicles
• Personal care, comfort, and personal items

Key Benefits of a Special Needs Trust

Preserves Eligibility for Government Benefits

• One of the primary advantages of a special needs trust is that it allows the beneficiary to retain their eligibility for critical government programs, including Medicaid and SSI. Directly giving money to a person with disabilities can disqualify them from receiving these benefits, but assets placed in a trust are not counted as part of the individual’s personal resources.

Supplemental Financial Support

• A special needs trust provides funds to cover "extras" or supplemental needs that are not covered by public benefits. This allows the person with a disability to have a higher quality of life and access to services and comforts that would not otherwise be available.

Flexibility and Control

• The trust can be structured to provide for the beneficiary’s needs over their lifetime. The trustee has control over how the funds are distributed, ensuring that the money is used responsibly for the beneficiary’s benefit.

Protection from Creditors and Legal Actions

• Assets in a special needs trust are protected from creditors, lawsuits, and other financial risks, which means they are safe from legal judgments or debts that the beneficiary might incur.

Professional Management

• A special needs trust allows for a trustee to manage the funds professionally, ensuring that the assets are used wisely and according to the terms of the trust. The trustee may be a family member, a trusted friend, or a financial institution, depending on the preferences and needs of the family.

Peace of Mind for Families

• Families can rest easy knowing that their loved one with special needs will continue to receive care and support long after they are gone. The trust ensures that the individual will have a reliable financial resource for their lifetime.

Types of Special Needs Trusts

First-Party Special Needs Trusts

• Funded with assets belonging to the individual with a disability (e.g., an inheritance or personal injury settlement). These trusts are often required when the disabled person has funds they want to protect, such as from a lawsuit or inheritance. The government requires that any remaining funds in the trust be used to pay back Medicaid benefits after the beneficiary passes away.

Third-Party Special Needs Trusts

• Funded by someone other than the individual with the disability, such as a family member or friend. These are the most common type of special needs trust and are usually established as part of an estate plan. There is no requirement to repay Medicaid after the beneficiary’s death, and the remaining assets can be distributed to other heirs.

Pooled Special Needs Trusts

• Managed by nonprofit organizations, pooled trusts combine assets from multiple beneficiaries into a single trust while maintaining separate accounts for each beneficiary. These trusts are a good option for individuals with limited assets or those who may not have family members to manage the trust.

Why You Need a Special Needs Trust

Without a special needs trust, your loved one with a disability may lose access to essential government benefits if they inherit money or assets. A special needs trust ensures they can still qualify for programs while enjoying the additional financial support needed for a better quality of life.

Why Choose SMITH | ASHCRAFT

At SMITH | ASHCRAFT, we specialize in creating and managing special needs trusts that cater to your loved one’s specific needs. Our attorneys will guide you through the process, ensuring the trust is properly established and maintained to protect both the beneficiary and your family’s wishes.

Contact us today to learn how a special needs trust can provide long-term security for your loved one with disabilities.