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How a Special Needs Trust Can Provide for a Loved One With Disabilities

Posted on in Estate Planning

elginAs part of the estate planning process, a family may be looking to make sure they can help their loved ones provide for their needs. This is especially true for family members who have disabilities or other special needs, since they will often need assistance to make sure they will be able to cover their ongoing expenses. However, people with disabilities may also rely on government aid or public benefits, and in many cases, they will only qualify for these types of benefits if they have limited assets or income. This means that a gift of money or assets from a family member could make them ineligible for certain types of benefits. To avoid this issue, a family may be able to set up a special needs trust.

Resources That Affect SSI and Medicaid

Typically, people with qualifying disabilities can receive Supplemental Security Income (SSI) through Social Security, as well as healthcare benefits through Medicaid. To qualify for these programs, a person must own no more than $2,000 in resources, including cash, funds in bank accounts, investments, or retirement savings. 

Rather than gifting money or assets directly to a person with special needs, it can be better to create a trust. With a special needs trust, assets will not be owned by the person, but by the trust itself, and a trustee will manage these assets and distribute them to the beneficiary. Ensuring that assets in the trust are used for the proper purposes will help the beneficiary meet certain needs without jeopardizing their eligibility for government aid.

Certain types of resources are considered “non-countable,” and they will not affect a person’s eligibility for SSI or Medicaid. A special needs trust may be used to purchase or help pay for these types of assets, which may include:

  • The home where the disabled person lives

  • A vehicle used by a disabled person or a member of their household

  • Household goods, such as furniture or appliances

  • Assets set aside for a Plan to Achieve Self-Support (PASS) that will allow a person to receive education or training or purchase assistive technology or other items that will allow them to pursue a career in the future

  • Up to $100,000 in an Achieving a Better Life Experience (ABLE) account

A special needs trust may also be used to provide for certain types of ongoing needs that would not be covered by public benefits. These may include transportation, non-covered medical costs or dental care, computers or other electronic devices, or recreational activities.

Contact Our Kane County Special Needs Trust Lawyers

If you are looking to provide assistance for a loved one who has a disability or other special needs, Ariano Hardy Ritt Nyuli Richmond Lytle & Goettel, P.C. can help you understand your best options, and we will work with you to make sure a special needs trust is created and managed correctly. Contact our Elgin estate planning attorneys by calling 847-695-2400 to arrange a complimentary consultation.

 

Sources:

https://specialneedsanswers.com/what-is-a-special-needs-trust-13601

https://www.ssa.gov/ssi/text-resources-ussi.htm

https://www.ssa.gov/ssi/spotlights/spot-plans-self-support.htm


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