Planning for a loved one with special needs

When planning for a loved one with special needs, it’s crucial to ensure their long-term financial and care needs are met without jeopardizing their government benefits. A Special Needs Trust (SNT) offers a solution by protecting these benefits while preserving assets for future use, ensuring your loved one has the support they need throughout their life. So, what are the requirements for creating a SNT, and is this a complicated process?

There are some basic requirements for every SNT.

A special needs trust document must be created. Another requirement is that trustee distributions be discretionary, meaning that the trustee (the person handling the money) can decide how to use the funds, following the terms outlined in the trust.

In addition, the beneficiary (the disabled person) is not entitled to income or principal from the SNT. This means that the Trustee cannot give trust money to the disabled person directly; rather, the Trustee will use the funds to pay for the disabled person’s needs.

The disabled person, as the beneficiary of the SNT, must be under 65 when the trust is established.

A special needs trust is not an option for disabled people over 65 who inherit or receive money from a settlement. However, there is almost always something that can be done to preserve excess assets and protect eligibility for public benefits programs. If this is you, call us at 404-843-0121 today to discuss asset protection. You can also learn about asset protection here.

There is more than one type of SNT, and each has different requirements in addition to those we’ve already mentioned.

Some SNTs must include Medicaid “pay-back” provisions, while others allow leftover assets to be designated for other family members or charities. Some SNTs must also be for the “sole benefit” of the disabled person. Finally, some trusts are required to be irrevocable, meaning they cannot be changed after they are established, while others can be revocable, which allows for more flexibility if circumstances or needs change.

We know this may sound complicated, so we will share an example.

Jake has Down’s syndrome and has always lived with his parents. Jake’s parents want to ensure he is “set for life” when something happens to them. Jake’s parents are comfortable financially, but they are worried about leaving assets to Jake outright because they don’t know how that would affect his ability to get public benefit programs, like Medicaid, later in life. Jake’s parents sat down with our attorneys and determined that an SNT was the best way to leave an inheritance for Jake while allowing him to apply for benefits later if he needed them. The type of SNT they established for Jake also provides for any money left over at Jake’s death to go to their other children.

An approval process is required before putting assets into the trust.

Attorneys are required to send a draft of the SNT to the Trust Unit of the Georgia Department of Community Health. This will ensure that the trust meets all the necessary requirements. Families can be assured that their disabled loved ones’ needs will be met while their eligibility for public benefits will be protected.

As you can see, it is crucial to consult an attorney with experience in special needs trust planning to ensure the right type of trust is established for your loved one and all their other affairs are in order. Hurley Elder Care Law, Georgia’s premiere elder law firm, offers complimentary phone consultations with our intake specialists to answer your special needs trust and elder law questions. Proactively planning for your loved one is essential to their long-term well-being.