Who Needs A Special Needs Trust?
Rudy was diagnosed with downs syndrome at birth. His parents want to leave him some money when they die but they don’t want to jeopardize his public benefits.
Margaret, fifty-four, is schizophrenic and receives Supplemental Social Security (SSI). She just inherited $100,000. The funds disqualify her from her income and more importantly from her medical benefits.
Martin was in a car accident and received a small settlement. He receives Social Security Disability Income (SSDI) and lives in a group home. If he keeps the money he will need to private pay.
These are just a few examples of situations where a Special Needs Trust could save benefits and improve the quality of life for people receiving public benefits.
What is a Special Needs Trust?
A trust is a legal arrangement where one person puts funds in the hands of a trustee, who manages the funds according to the terms of a legal document for the beneficiary. A Trust is a legal method for tailoring the distribution of money to a loved one with special needs and protecting public benefits. A Special Needs Trust is a very unique type of trust that allows for funds to be set aside for a person who is receiving (or may in the future receive) public benefits. The funds in a Special Needs Trust must be managed by a Trustee. The trustee cannot be the same person as the beneficiary. The funds placed in trust may come from the beneficiary or from third parties, like parents or friends.
The money in a Special Needs trust is for the beneficiary’s extra, special or supplemental needs. Generally, the money may not be used for support. The funds are used to provide for the things that are NOT covered by public benefits.
Special Needs Trusts are allowed because of an exception under federal law.Read Full Article