Creating a trust for a family member who has a disability is a great way to ensure they have financial support while making sure they get benefits from the government. But a special needs trust or SNT can be hard to navigate if you do not have knowledge of this kind of trust. This is where The Ebbert Law Firm can help you. The firm has estate planning attorneys who specialize in trusts and can help you establish one for your loved one.
What are Special Needs Trusts?
SNT is made for people who have a mental or physical disability. It is created while considering the disabled person’s needs, future, and lifestyle. People craft this trust to help the beneficiary get trust and government funds. This trust protects the beneficiary against financial abuse by offering direction to ensure the wise spending of the funds.
Usually, SNTs are utilized for supplemental items to enhance quality of life. They can pay for health attendants, personal care, home furnishings, vacations, education, rehabilitation, transportation, and out-of-pocket dental and medical bills.
How SNTs Impact Medicaid Benefits and Supplemental Security Income
If you are caring for a loved one who has special needs, this could mean they get government assistance through Medicaid, HUD housing, and SSI. By establishing an SNT for this loved one, they can still get the full government benefits as the trust’s assets will not affect the asset limit. Distribution of a special needs trust is often paid for the beneficiary not directly to them. Otherwise, such funds would be counted against SSI can lead to deductions. To ensure the trust is established properly, consult with a lawyer who specializes in this type of trust.
No Minimum Amount is Required
An SNT can be established without needing to put up a certain amount of money. The amount will depend on some factors like the disability’s nature and the required care level. But although there is no minimum amount required, it is best to have a minimum of $100, 000 in the trust because of the establishment and management costs. Such an amount can be collected from inheritance, family assets, life insurance policies, or settlements.
Why Set Up an SNT
Setting up an SNT helps your family plan for your loved one who has special needs. Here’s why you should establish this type of trust:
- Supplement care beyond what the government offers. Although people who have special needs usually get support from government funds, such programs only offer basic, essential support. A special needs trust will let you give extra funds to improve your loved one’s quality of life.
- Ensure proper distribution of assets as intended. An SNT ensures the assets and funds are distributed according to the intended purpose. This is possible through the terms directed by the trust apart from the SSA and IRS. Such government agencies have certain guidelines that an SNT needs to follow to ensure correct distribution.
- Maximize personal injury settlement benefits. If your loved one with special needs wins a huge lump sum settlement in a personal injury case, directing the funds into an SNT will make sure they can be utilized for expenses that can improve their quality of life.
Working with the Right Lawyer
Talking to a lawyer who specializes in SNTs ensures that you can navigate the system properly. This helps answer your questions and lets you set up a trust that meets your specific needs. Also, the lawyer can offer additional resources like contact details for experienced financial planners and personal referrals to other families that have members with special needs who can offer some type of support.