Special Need Trust
A special need trust is almost identical to the trust you know. However, there exist a huge difference. A special need trust is a legal arrangement and fiduciary association that allows a physically or mentally incapacitated individual or an individual with chronic illness to obtain income without diminishing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security income, Medicare or Medicaid.
In a fiduciary relationship or association, an individual acts in the best interest of an individual or individuals to manage assets.
A special needs trust is a common technique for individuals who want to assist someone in need without risking the person’s eligibility for schemes that requires their income or assets to stay at a particular limit.
How Can a Special Needs Trust Funds be Spent?
The trustee cannot offer money directly to your loves ones, the beneficiary of the trust. Doing so could meddle with eligibility for SSI and Medicaid. However, the trustee can spend trust assets to purchase goods and services for your loved ones. Special needs trust are typically used to settle personal care attendants, vacations, home furnishings, out-of-pocket medical and dental expenses, schooling, recreation, cars, including physical rehab.
How can A Special Needs Trust Be of Help?
One way to prevent yourself from losing eligibility for SSI or Medicaid is to set up this trust. After it must have been set up, instead of transferring your assets directly to your loved ones, you can simply retain it in the special needs trust.
In addition, you can also designate an individual to act as trustee. This individual will know all about the trust assets and will be charged with spending money on your loves one’s behalf. Since your loves ones will have zero control over the money, SSI and Medicaid admins will turn a blind eyes on the trust property for program eligibility purposes. The trust will end when it is no longer required, most times, this happens at the beneficiary’s death or when the money in the trust has been exhausted.
Who is a Special Needs Trust For?
Disabled individuals may require different types of lifelong assistance. Health insurance can be a very significant issue, because an individual with a severe disability may never be able to work at a job that offers health insurance. As such, it is important that the individual gets coverage under Medicaid, a federal-state program. However, Medicaid provides benefits to only individuals who have little income and resources. If parents leave assets to a disabled child, that inheritance can make it impossible for the child to qualify for Medicaid.
Now, that is where this unique type of trust comes in. By leaving funds in trust for a child, rather than leaving them directly to a child, parents can ensure that the child qualify for Medicaid benefits. The child doesn’t have any say over the trust funds, as they are controlled but the trustee designated by the parents. Even a trust with a million dollar in it won’t affect the Medicaid eligibility of the beneficiary of the trust. According to the words used by the government, the trust funds are not regarded as a resource of the beneficiary.
Pooled Trust
If peradventure, you are finding it difficult to come up with a good candidate to serve as the trustee, or if you are leaving a relative a huge amount of money and don’t want to create different special needs trust, consider a “pooled trust.” Pooled trusts are special needs trusts operated or managed by nonprofit organizations that pool and invest funds from several families. Each trust beneficiary has a different account, and the trustee selected by the nonprofit organization spend the money on behalf of each beneficiary. Pooled trust, which is also regarded as community trust, is operational in several areas of the country.
Special Needs trust Lawyer Buffalo, NY
Of course, there are several tools out there that can be used to set up a special needs trust. However, it is advised that you seek the help of a special needs trust lawyer Buffalo, NY, when creating a special needs trust for yourself or your loved ones. A special needs trust lawyer is familiar with the process of setting up thus trust. In addition, these professional boast of the experience needed to set up the trust just the way you want it!