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SPECIAL NEEDS TRUSTS

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SPECIAL NEEDS TRUSTS

If you have a loved one living with a disability, then you know how challenging it can be to safeguard his personal and financial well-being while protecting his eligibility for essential government benefits. In order to qualify for needs-based benefits like Medicaid and SSI, individuals can have no more than $2,000 in available resources. This doesn’t leave much for personal savings, let alone basic needs.

Thankfully, there’s a financial tool that can help – a special needs trust. This type of trust is designed to set aside funds that can be used for supplemental needs that enhance a person’s quality of life. Once the funds are safely held in the trust, which is administered by a trustee, they no longer count as available resources. Your loved one is able to keep his government benefits, while having the opportunity to enjoy a rich and fulfilling life.

EXAMPLE EXPENDITURES:

  • Auto maintenance
  • Transportation costs
  • Clothes
  • Club memberships
  • Educational programs
  • Entertainment
  • Eyeglasses
  • Furniture
  • Health needs that are not covered by your benefits
  • Hobbies
  • Laundry and dry cleaning
  • Mobility equipment
  • Music lessons, instruments
  • Personal care items
  • Pets and pet supplies
  • Pre-need burial expenses
  • Private nurse
  • Phone and cable bills
  • Transportation costs

WHAT CAN A SPECIAL NEEDS TRUST PAY FOR?

Special needs trusts provide for a broad range of items and services that can enhance your loved one’s quality of life. However, in order to protect needs-based benefits, there are some rules around how trust funds can be used. For example, funds used for food or shelter or distributed as cash or checks may affect eligibility. It is important to work with an experienced attorney who can guide you through the process.

TYPES OF SPECIAL NEEDS TRUSTS

There are several types of special needs trusts. Depending on your unique situation, one may be better suited to your needs than another.

FIRST PARTY (SELF-SETTLED) TRUST

With first-party trusts, the assets belong to the individual with the disability. This type of special needs trust can only be established by the beneficiary, parent, grandparent, legal guardian, or court.

FIRST PARTY (SELF-SETTLED) TRUST

With third party trusts, the assets belong to someone other than the individual with the disability. Anyone other than the beneficiary can contribute to a third party special needs trust.

COURT-ORDERED TRUST

With court-ordered trusts, the assets most typically belong to the individual with the disability via a court settlement or an inheritance.

POOLED TRUST

With a pooled special needs trust, a nonprofit agency is the one to establish and manage the trust. While individual beneficiaries have their own accounts, assets are pooled together for investment and management purposes.

MEDICARE SET-ASIDE TRUST

Funds placed in this type of trust come from an injury or worker’s compensation settlement. They can be used to pay for future expenses related to the injury.

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TRUE LINK CAN HELP

True Link works closely with leaders in the field who specialize in serving individuals with disabilities and their families. Our in-house team can assess your needs and connect you with a special needs trust attorney within our vetted network of professionals.

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* The materials available here are for informational purposes only and not for the purpose of providing legal advice.