An introduction to Special Needs Trusts

An introduction to Special Needs Trusts

Loved ones of all ages with special needs often have increased financial and care needs. Ensuring their long-term welfare presents unique challenges for disabled persons and proper estate planning is especially important. A Special Needs Trust (SNT) can provide the necessary financial support needed without jeopardizing the individual’s government benefits. SNTs can be a way to protect public benefits and preserve extra assets for use throughout the disabled person’s lifetime.

Just for starters, an example of a situation Hurley Elder Care Law can assist with is a client who wants to plan for the care of an autistic grandchild. We would create a SNT that can help pay for care without affecting the public benefits the child receives throughout their life. We will share other examples of when a SNT can come in handy in our April blogs as we further discuss this useful type of trust.

What does it mean to be disabled?

The Social Security Administration considers those that are (1) blind or (2) those that are unable to do any “substantial gainful activity” due to severe physical or mental impairments that will result in death or will continue for not less than one year to be disabled. However, this disability determination is not automatic.

Some common disabilities include: autism, cerebral palsy, Down syndrome and traumatic brain injury, just to name a handful. The CDC reports that 27.2% of adults in our home state of Georgia have some type of a disability, which is higher than the national average of 25.6%.

Disabled persons, like all of us, have many important needs. 

There are basic needs like, clothing, food, and shelter. Some disabled persons also require help with care and activities of daily living. Activities of daily living are bathing, dressing, feeding, toileting, transferring, and walking. There is also the need for fun and enjoyment of life, like entertainment, recreation, and travel.

In addition, there may also be the need for more sophisticated dental, medical, and diagnostic treatment than what is available through public assistance programs. The disabled person may even need supplemental education or private rehabilitation to enhance their quality of life.

Let’s face it, public benefits programs, although crucial, have their limitations.

While we all recognize the importance of public benefit programs for those with disabilities, we must admit that they do have their limitations, especially SSI and Medicaid.

People who are awarded Social Security Disability (which differs dramatically from SSI) do not require a SNT.  It’s always important to understand which benefits you specifically receive.

Often times families want to be able to leave gifts, inheritances and the like to their disabled loved one—and this is a good thing! However, it must be managed correctly. A SNT can help cover the needs of a disabled person, manage resources for a disabled person’s benefit, and preserve eligibility for public assistance programs, such as SSI and Medicaid. Stay tuned next week as we talk about the requirements for a special needs trust!