Special Needs Trust

A Sailor plays with a child from the Association

A special needs trust (or supplemental needs trust) can be an essential tool in providing for the care of an individual with a disability.  A special needs trust allows for the accumulation of an unlimited amount of assets dedicated to the care of the beneficiary of the trust, while at the same time allowing the beneficiary to continue to be eligible for need-based programs such as Supplemental Security Income (SSI) and Medicaid.

Special needs trusts help ensure your loved one’s quality of life.  Government benefit plans only pay for items such as food, shelter, and basic medical care.  The funds from a special needs trust can then be used to cover items and services that contribute to the health, safety, and welfare of the beneficiary over and above what the government provides.   The supplemental items and services that can be provided to the beneficiary of a special needs trust include a vehicle or other transportation, vacations, a computer and/or other electronic devices, audio equipment, Internet services, cable or satellite services, audio equipment, and furniture, as well as therapy and medical care not covered by Medicaid.

Special needs trusts are most commonly used for people who likely will need government assistance their entire lives because of a permanent or severe disabling condition.  However, many disabling conditions are not permanent and changes in the workplace, new treatments for disabilities, and new technologies for living with disabilities may affect whether a loved one will need government benefits in the future.  A special needs trust can still be invaluable as a receptacle to receive gifts or aid in a way that will not disqualify a beneficiary from government benefits for the time the beneficiary needs them.  Also, a special needs trust can be established before an individual’s 65th birthday in anticipation of that individual needing to qualify for needs-based government assistance at some point in the future. For example, if a person has a disabling condition is currently able to earn a living, it may still be advantageous to set up a special needs trust now in anticipation of the time when the person will no longer be able to continue working.

A special needs trust also serves to protect the assets that have been set aside for the care of the beneficiary. When cash or other assets are given directly to a person with special needs, or to a caretaker such as a sibling, then those assets are available to creditors or to satisfy judgments.  Assets placed in a special needs trust can only be used for the care of the person with a disability and cannot be touched by creditors of either the beneficiary or the beneficiaries caretakers.

A special needs trust can be a complicated legal instrument, and the above benefits are only secured by a properly drafted special needs trust. An improperly written special needs trust can result in a loss of benefits, a loss of savings, or other financial and legal hardships. It is important to consult an attorney to not only properly establish a special needs trust, but to help answer how to administer the trust, including when and how to fund the special needs trust and when and how to dissolve it.

The Law Offices of Lynda L. Hinkle is available to help you plan for the care of your loved one.  Contact us today for a free half-hour consultation at 856-227-7888, oWe have locations in Camden, Burlington, and Gloucester counties, and are happy to discuss your legal options.