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When creating or revising your estate plan, it\u2019s important to take into account all of your loved ones. Because each family has its own unique set of circumstances, there are a variety of trusts and other vehicles available to specifically address most families\u2019 estate planning objectives.<\/p>\n
Special needs trusts (SNTs), also called \u201csupplemental needs trusts,\u201d benefit children or other family members with disabilities that require extended-term care or that prevent them from being able to support themselves. This trust type can provide peace of mind that your loved one\u2019s quality of life will be enhanced without disqualifying him or her for Medicaid or Supplemental Security Income (SSI) benefits.<\/p>\n
Preserve government benefits<\/strong><\/p>\n An SNT may preserve your loved one\u2019s access to government benefits that cover health care and other basic needs. Medicaid and SSI pay for basic medical care, food, clothing and shelter. However, to qualify for these benefits, a person\u2019s resources must be limited to no more than $2,000 in \u201ccountable assets.\u201d Important note: If your family member with special needs owns more than $2,000 in countable assets, thus making him or her ineligible for government assistance, an SNT is useless.<\/p>\n Generally, every asset is countable with a few exceptions. The exceptions include a principal residence, regardless of value (but if the recipient is in a nursing home or similar facility, he or she must intend and be expected to return to the home); a car; a small amount of life insurance; burial plots or prepaid burial contracts; and furniture, clothing, jewelry and certain other personal belongings.<\/p>\n An SNT is an irrevocable trust designed to supplement, rather than replace, government assistance. To preserve eligibility for government benefits, the beneficiary can\u2019t have access to the funds, and the trust must be prohibited from providing for the beneficiary\u2019s \u201csupport.\u201d That means it can\u2019t be used to pay for medical care, food, clothing, shelter or anything else covered by Medicaid or SSI.<\/p>\n Pay for supplemental expenses<\/strong><\/p>\n With those limitations in mind, an SNT can be used to pay for virtually anything government benefits don\u2019t cover, such as unreimbursed medical expenses, education and training, transportation (including wheelchair-accessible vehicles), insurance, computers, and modifications to the beneficiary\u2019s home. It can also pay for \u201cquality-of-life\u201d needs, such as travel, entertainment, recreation and hobbies.<\/p>\n Keep in mind that the trust must not pay any money directly to the beneficiary. Rather, the funds should be distributed directly \u2014 on behalf of the beneficiary \u2014 to the third parties that provide goods and services to him or her.<\/p>\n Consider the trust\u2019s language<\/strong><\/p>\n To ensure that an SNT doesn\u2019t disqualify the beneficiary from government benefits, it should prohibit distributions directly to the beneficiary and prohibit the trustee from paying for any support items covered by Medicaid or SSI. Some SNTs specify the types of supplemental expenses the trust should pay; others give the trustee sole discretion over nonsupport items.<\/p>\n Alert family and friends<\/strong><\/p>\n After creating or revising your estate plan, discuss your intentions with your family. This is especially important if your plan includes an SNT. To ensure an SNT\u2019s terms aren\u2019t broken, family members and friends who want to make gifts or donations must do so directly to the trust<\/em> and not to the loved one with special needs. Contact us with any questions regarding an SNT.<\/p>\n \u00a9 2024<\/em><\/p>\n <\/body> When creating or revising your estate plan, it\u2019s important to take into account all of your loved ones. Because each family has its own unique set of circumstances, there are a variety of trusts and other vehicles available to specifically address most families\u2019 estate planning objectives. Special needs trusts (SNTs), also called \u201csupplemental needs trusts,\u201d […]<\/p>\n
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