Creating a special needs trust can be vitally important if you want to provide any type of financial support or financial gift to someone in your life who is disabled. You may also wish to create a special needs trust to help a disabled person get protection for his or her own assets if money is going to be coming in from something like an injury settlement.
The Law Offices of James A. Miller, P.C. can provide assistance in creating a special needs trust and can help you to determine if you need one. We not only assist you with creating a trust, but we can also help you to understand the rules for what the money in this kind of trust is allowed to be used for. To find out more, give us a call today.
Why Do You Need a Special Needs Trust?
If you are a parent, guardian, or loved one of a person who has special needs, you may want to give a gift during your lifetime or after your death to enhance the quality of life of your disabled relative. Many people with severe disabilities cannot work, and the gift you provide to them could make the difference between having the minimum needed to get by and having some luxuries.
Unfortunately, if you make a financial gift to a person who has special needs, your gift could count as a resource that is factored in when determining if the disabled person is entitled to means-tested benefits. Many people with disabilities are very reliant on means-tested benefits like Medicaid and Supplemental Security Income. If your gift causes them to lose access to these benefits, this could be financially devastating.
The same is true if a person with special needs is reliant on these benefits and receives money from a source like an injury settlement. Whenever a person with a disability is about to acquire too many resources to continue qualifying for Medicaid, SSI, and other needs-based government programs, this could be a crisis.
The crisis can be averted through the use of a special needs trust. When this kind of trust is created, the assets that would otherwise be disqualifying are transferred into the trust. The trust owns the assets, the disabled person is the beneficiary, and a trustee controls the assets. Not only does this preserve access to benefits, but it also ensures that a trustee can manage the assets in an appropriate way, which the disabled person might not otherwise be able to do.
What are the Limits on What Money in a Special Needs Trust Can be Used For?
When money is put into a special needs trust, there are rules for what the funds are allowed to be used for. Those who create the trust must know these rules, and those who serve as a trustee must know these rules. Zimmer Law Firm can provide assistance with the rules, in order to ensure that there is no risk of losing benefits because the requirements are not followed.
A special needs trust is also called a supplemental needs trust since it is supposed to be used to provide for a disabled person’s needs that government benefits don’t cover. This means the funds can be used for a broad array of things that benefit the disabled person. The money could be used to take the person with disabilities out for treats; to fund travel and field-trip opportunities; to pay for electronics or games; or to do anything else that enhances quality of life for the disabled person. The trust creator will often provide some specifics in the trust document that the trustee should follow.
While the money can be used in lots of different ways, it CANNOT be used to give cash or cash equivalents to someone who is disabled. For example, money in a special needs trust cannot be used to pay the rent for the disabled person. It also should not be used to purchase gift cards.
Getting Help from A Worcester Special Needs Planning Lawyer
The Law Offices of James A. Miller, P.C. can offer invaluable help with the creation of a special needs trust and with taking other steps to provide appropriately for a loved one in your life who is disabled. The estate planning process can become more complicated if you want to provide for a child with special needs or to provide for another disabled relative. Let us help you to use the right legal tools so you can offer the support your loved one needs.
To find out more about how we can help, join us for a free seminar. You can also give us a call at 866-370-3888 or contact us online today to talk with a Worcester special needs planning lawyer about the ways we can assist you.
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