Special Needs Trusts
If you wish to provide for a person who may be eligible to receive Medicaid or Supplemental Security Income (SSI) benefits, beware. These benefits may be put in jeopardy by a well-meaning, but misplaced, act of generosity.
Medicaid and SSI are means-tested government programs which provide medical coverage and other valuable support to disabled persons. To be eligible, the individual must have less than $2,000 in non-exempt assets. A very modest gift may cause benefits to be cut-off.
One way to avoid this pitfall is to place funds intended for the benefit of such persons in a “Special Needs Trust”, also known as a “Supplemental Needs Trust.”
How A Special Needs Trust Works
The trust stipulates that the funds held in it are intended to supplement government benefits, not to replace them. An independent trustee (not the beneficiary) controls disbursements. The trust document directs the trustee to use funds to provide for the beneficiary in ways which do not place government benefits in jeopardy.
The trustee may pay for things that the beneficiary needs that are not provided by governmental benefits. Clothing, entertainment, travel, and other expenses can be paid by the trustee directly. The beneficiary is given much needed assistance, but is not given control over funds.
Set Up A No Obligation Consultation To Learn More
Our firm is here to help you create a special needs trust that works for your family. To learn more about your options, please fill out our online contact form or call our Greenville, Delaware, office at 302-888-2707.