Category: Special Needs Trust

Special Needs Trusts Can Build Wealth While Protecting Access to Public Benefits

October is Special Needs Law Month. Every year special needs attorneys and advocates organize to help raise awareness and educate those with special needs, their families, and caregivers about their legal rights and care options.


One of the most important services they provide, is planning guidance. Or, how best to provide long-term stability for a family member with a physical or mental disability, even after their parents or guardians have passed away. Often, the best way to do this is through a Special Needs Trust.


A Special Needs Trust is a type of irrevocable trust that specializes in allowing disabled people to use assets held in trust for their benefit, while at the same time allowing them to receive essential government benefits, like Medicaid and Supplemental Security Income. An additional protection is that a Special Needs Trust can hold and manage property intended  for a special needs person but without giving them control if he or she lacks the legal capacity to handle his or her own affairs.


Normally, government programs have very low income thresholds. One gift of $2,000 given directly to a special needs person from a loving relative, for example, could undermine entire eligibility status. Further, the gift doesn’t even have to be cash to disqualify the person.


Thankfully, money given to a Special Needs Trust shields disabled persons from these income limits because they won’t technically own the assets. Instead, under this estate planning technique, the trust will.


In these scenarios, Medicaid and Supplemental Security Income would provide for basic healthcare and living needs, while the Special Needs Trust could provide for “special needs,” such as educational programs, specialized therapies, and even comfort and luxury items. Public funds are not meant for these purposes.


Here is a word of caution. If the Special Needs Trust is used to pay for basic items, like groceries and simple housing costs, or if payments are made directly to the beneficiary, then those payments could be construed as income and your special needs family member could lose public benefits. In addition, the Supplemental Security Income program does not allow for cash to be given directly to a Special Needs Trust beneficiary. This can include groceries, rent, mortgage payments or electric utilities. It is important to speak with your attorney to learn how to make proper distributions.


We know this article may raise more questions than it answers for you. Do not wait to contact our office to schedule a meeting with attorney Anne’ Desormier-Cartwright.

3 Advantages to Starting a Special Needs Trust with Your Child’s Settlement

If your child received a settlement for disabling injuries caused by a medical malpractice event or preventable accident, then you may want to seriously consider directing the settlement proceeds to a Special Needs Trust. The same can be true if your child was born with a disability that will have a lifelong impact on him or her. Unfortunately, the cost of care for a disabled person can be considerable. You do not want to fail to create the estate planning tools that can ensure your loved one has the support he or she needs both now and in the future.

Special needs planning involves many financial considerations. This can include, but not be limited to, providing a long-term income stream for the disabled person, meeting tax obligations, ensuring there is insurance coverage, and what to do when the disabled person’s primary caregivers are no longer able to provide care. These are only a few of the considerations that Special Needs Trusts are designed to address and handle for your loved one.

Are you wondering where to start? Do you need to know if this type of trust is right for you and your loved ones? Let us share three advantages that can help steer you in the right direction which we share with our clients as well.

1. Public Benefits.

Put simply, Special Needs Trusts are legal arrangements that benefit disabled persons. One of the biggest advantages of a Special Needs Trust is that it protects against losing public benefits meant to help your child and your family. This is no small perk. It is estimated, for example, that Medicaid health insurance alone can stem into seven-figures over the course of a disabled child’s lifetime.

Other benefit programs include Healthy Kids, KidCare, Supplemental Security Income or “Disability,” Medically Needy Program, housing assistance, state waiver programs, and even nursing home financial aid. There are many public support programs intended to help families shoulder the financial burden of caring for disabled individuals, including those offered at the state and locals levels.

2. An Open Door.

Even if you receive a large financial settlement and have no intention of taking advantage of government programs, it is advisable to keep the door open in case you change your mind or circumstances change in the future. Settlements are almost never enough to last a lifetime, and circumstances may dictate a course correction down the road. Plan early to ensure that you can keep all options open.

3. Financial Management.

A Special Needs Trust can use settlement proceeds to fund income generating investments, and given the right trustee, it can also help protect against short-sighted spending decisions. A settlement is not the lottery. Funds need to be prudently managed to last as long as possible.

If properly managed, Special Needs Trusts present a significant opportunity to generate settlement-funded returns, acquire public assistance for basic needs, and use settlement funds for extra expenses and individualized care.

Let us help you plan for the current and future needs of your loved one with special needs. This article just begins the type of planning we can work on together to make a difference. Do not wait to contact our office to schedule an appointment.