SPECIAL NEEDS TRUSTS
Special Needs Trusts – also known as supplemental needs trusts – allow a beneficiary with disabilities to receive gifts, lawsuit settlements or other funds without losing eligibility for certain government programs. Special Needs Trusts pay for items that could not be paid for by public assistance. These trusts typically pay for things like education, recreation, counseling, items that reach beyond the simple necessities of life. The trust funds can also supplement basic support (such as food, and shelter) if the trust is property drafted.. The overall goal in special needs trust planning is to maximize and supplement – but not supplant – the goods and services from government resources already provided or which could be provided to persons with disabilities. We can assist with the drafting and administration of First and Third Party Trust.
First Party Special Needs Trusts. Some programs allow disabled individuals to fund trusts with their own money. These “self-settled” trusts are established by disabled individuals with their own funds, whether received because of an accident, medical malpractice, inheritance or other means. There are different rules regarding first party trusts and third party trusts.
Third Party Special Needs Trusts. Third Party Special Needs Trusts are funded with another person’s money. We can draft a third party special needs trust to protect an inheritance so the funds are not included in the beneficiary’s assets for public benefits eligibility. These trust can be part of your will or living trust to be funded by you, or can be created as a stand alone trust which can be funded by you and others.
In many cases, individuals mistakenly believe that they need a First Party Special Needs Trust because they think they are receiving need’s based benefits, (such as Supplemental Security Income or Medicaid) rather than entitlements for which assets and income are irrelevant (such as Social Security Disability Benefits) and a Special Needs Trust may not be needed at all. We can help you make this determination to avoid the unnecessary expense of a Special Needs Trust.