What is a Special Needs Trust?
A Special Needs Trust is a very beneficial tool that can dramatically improve the quality of life for someone who receives one or more public benefit programs like Medicaid or Supplemental Security Income (SSI).
Are there different kinds of Special Needs Trusts?
Yes, there are several kinds of Special Needs Trusts with different names, but they all share the common trait of maintaining eligibility for asset tested public benefit programs. The differences between each type of Trust are based on whose money is funding the Trust and what requirements exist for establishing it. You can learn more by calling (877) 766-5331 or visiting our How to Establish a Special Needs Trust page.
What are the benefits of a Special Needs Trust?
Special Needs Trusts have a number of benefits. First, they create the ability for a Trust beneficiary to stay eligible for financially tested public benefit programs like Medicaid and Supplemental Security Income (SSI). In the process of maintaining eligibility for these programs, a Special Needs Trust also creates a supplemental fund that can be used to maximize the beneficiary’s quality of life. Since quality of life is a personal matter, the multiple benefits that flow from a Special Needs Trust are always defined by the needs and goals of the Trust beneficiary.
What are some specific examples of how a Special Needs Trust can be used?
Special needs trusts can pay expenses for the comfort and happiness for a beneficiary. These are things that can improve the quality of life for an individual, and include such things as the examples below.
  • Purchase of a home or condo along with any necessary improvements and maintenance.
  • Property tax and homeowners insurance.
  • Purchase of a vehicle and/or vehicle modifications.
  • Vehicle insurance, normal operating expenses, and necessary maintenance.
  • Alternative transportation such as cab fare or bus passes.
  • Travel expenses, such as airfare.
  • Household goods, personal property, and clothing.
  • Telephone, cable, and internet services.
  • Education expenses and computer equipment.
  • Medical durable equipment, such as wheelchairs, lifts, and other equipment.
  • Home care services not covered by public benefit programs.
  • Dental care, physical therapy, massages, support services, and other medical costs not covered or minimally covered by public benefit programs.
  • Pre-need funeral expenses.
  • Entertainment expenses, such as magazine subscriptions, books, hobby supplies, tickets to movies, plays, museums, and sporting events.
Who may benefit from a Special Needs Trust?
Pretty much anyone who receives financially tested programs like Medicaid or SSI can benefit from a Special Needs Trust if they are about to receive assets or if they have family members who want to give them assets by making a gift or leaving an inheritance.
What if we are not concerned with public benefit programs?
Then a Special Needs Trust is probably not something you need to consider. However, if there is any chance that eligibility for public benefits could be a concern in the future, a Special Needs Trust is a flexible option that provides peace of mind. Also, a Special Needs Trust is still a Trust even if it does not need to be administered so that it protects public benefit eligibility. This means that it can offer the benefit of asset management and protect against spendthrift tendencies, undue influence, and financial exploitation.
Who can establish a Special Needs Trust?
The answer depends on whose assets will be funding the Trust. If the Trust beneficiary’s assets are funding the Trust, it will usually be established by the Trust beneficiary’s parent(s), grandparents(s), legal guardian, or a court. Depending on the type of Trust, the beneficiary may or may not be able to establish, or sign, his or her own Trust. By contrast, if the Trust beneficiary’s assets are not funding the Trust, it can be established by anyone except the beneficiary, the beneficiary’s spouse, or an agent of the beneficiary. This can sometimes be a bit confusing, so please call (877) 766-5331 or visit our How to Establish a Special Needs Trust page. for more information.
Who can be the trustee of a Special Needs Trust?
It depends on the type of Special Needs Trust that is being established. For Non-Pooled Special Needs Trusts, anyone who can properly discharge all of the duties required of the Trustee can act as Trustee. Typically, the trustee is chosen in the drafting process with the guidance of legal counsel. By contrast, for Pooled Special Needs Trusts, the Trustee must be a non-profit association.
Should a professional Trustee be used for Special Needs Trusts?
It is always worth giving due consideration to professional services simply because administering any Trust can be a lot of work. The Trustee is liable to the Trust beneficiary and is responsible for investing the money, allocating an appropriate amount of liquid assets for ongoing needs, managing any real estate, keeping accurate records, providing regular accountings, preparing annual tax returns, paying any taxes that are due, and making proper disbursement of the funds. In addition, the Trustee of a Special Needs Trust must also have a full understanding of all the laws and regulations that apply to the Trust beneficiary’s public benefit programs so that eligibility is not lost or jeopardized. Even in those circumstances where a family member is capable of handling these complex issues, using a professional can free up the family member so they can focus on what generally more important for them. For many family members, having more time to focus on the Trust beneficiary is more important than taking on a difficult part-time job that comes with liability.
I am Trustee for a family member’s Special Needs Trust. Is it possible for someone else to take over?
You can always resign and have a successor Trustee take over. However, the way in which you go about this will depend on the Trust document. Some Trust documents are written with clear instructions and may even name successor Trustees. However, some Trust documents are silent, which means in some cases that a court may need to appoint a successor Trustee. The Center for Special Needs Trust Administration, Inc. frequently becomes the successor Trustee for Special Needs Trusts, and someone is available at (877) 766-5331 if you have additional questions about how to appoint a successor Trustee.
Do I need an attorney to set up Special Needs Trust?
It depends on the kind of Special Needs Trust you want to establish. For example, you will need an attorney if you want to set up a non-Pooled Special Needs Trust or if other aspects of your circumstances require legal representation. However, anyone can set up a self-funded or third-party funded Pooled Special Needs Trust by downloading the correct documents from our Trust Documents page and following the simple instructions that are provided. You can call us at (877) 766-5331 if you have any questions about these documents.