What is a Special Needs Trust?

A Special Needs Trust is a trust created by Federal law which holds title to property for the benefit of a child or adult who has a disability. The Special Needs Trust can be used to provide for the

needs of a disabled person to supplement benefits received from various governmental assistance programs including SSI and Medicaid. A special needs trust can own a home, van, investments or other property for the beneficiary.

"Special Needs" defined

Special needs refers to the requisites for maintaining the comfort and happiness of a disabled person, when such requisites are not being provided by any public or private agency. Special needs can include dental expenses, medical equipment, education, therapies, eye glasses, transportation (including vehicle purchase), maintenance, insurance (including payment of premiums of insurance on the life of the beneficiary) and travel. Special Needs Trusts may also include spending money, electronic equipment such as radios, CD players, television sets, and computer equipment, gifts, payments for a companion, and other items to enhance one?s life.

Who can establish a Special Needs Trust?

Parents (or other family members) of a disabled child can establish a Special Needs Trust as part of their general estate plan. The parents can "pour-over" that child's share of their estate into this special trust and not worry that their child will be prevented from receiving benefits when they are not there to care for the child. 

A disabled person who expects an inheritance or other large sum of money as the result of litigation may establish a Special Needs Trust. Receipt of these funds might otherwise disqualify them from public benefits. In many situations, a trust can also be established after the disabled person has received an extraordinary amount of money, though a court order may be necessary.   The trust cannot be funded after the beneficiary has reached the age of 65.

Who will manage the Trust's Assets?

The manager of a trust is called a "trustee". It can be any person over eighteen years of age, a bank, an attorney, CPA, or a professional fiduciary. The trustee holds, administers, and distributes all property allocated to the trust for the benefit of the disabled person during their lifetime. The disabled person cannot serve as trustee. The disabled beneficiary shall not be considered to have access to principal or income of the trust. The assets of the trust are for the benefit of the disabled person. However, the disabled person has no power or authority to direct the payment of funds.  We can assist you with the selection of a trustee.

What is placed in the Trust to establish it?

Any kind of asset may be held by the trust. Holding title by the trust is a simple process of putting the title to that asset in the trust's name.