Families of those with disabilities - physical or mental - are typically concerned with the best way to fund the long-term financial and personal needs of their special needs loved one in a way that will secure a fulfilling life for them. The best vehicle to accomplish this goal is known as a Special Needs Trust (SNT).
A SNT can be customized to the special circumstances of each family facing the need to secure the future of a disabled family member, while keeping their access to government benefits like Medicaid and Supplemental Security Income (SSI) intact.
In fact, the best-planned SNT will maximize the use of both private and governmental resources to benefit your disabled loved one. Families can use their personal assets to provide for qualify of life enhancements like education, training, vacations, hobbies or pets as a secondary source of support to supplement government benefits to meet the basic needs of a disabled family member.
Types of Special Needs Trusts
The most prevalent type of SNT is the Supplemental Care SNT, which are designed to serve as a supplemental resource after government benefits have been exhausted. The assets placed into a SNT are not considered “available resources” for purposes of qualifying for government benefits.
A General Support SNT is a trust that is set up to serve as the primary source of benefits, and will disqualify the beneficiary from receiving needs-based government benefits.
Determining which type of SNT is best for a special needs beneficiary depends on whether the assets placed in the trust will last for the lifetime of the beneficiary. If so, a General Support SNT could be appropriate. If not, a Supplemental Care SNT is the best choice since it allows the beneficiary to receive government benefits.
Establishing a SNT
To establish a SNT, the beneficiary must be disabled according to the guidelines established by the Social Security Act - i.e., unable to support themselves due to a disability - and also be under the age of 65 when the SNT is established.
If the disabled person is over 65, a “pooled” SNT in which numerous disabled parties participate, is an option. Several states as well as charitable organizations make pooled SNTs available for this purpose.
A trustee must be named for the SNT, and not all jurisdictions allow for family members to serve as trustees. In this case, a professional trustee such as a trust company or bank may be used to perform the fiduciary duties of the SNT.
We can help you and your family plan for the future financial security of a special needs family member. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.