SUPPLEMENTAL NEEDS PLANNING

If you currently provide care for a child or loved one with special needs (such as mental or physical disabilities), you likely have concerns about what may happen to them when you are no longer able to provide and care for them.

Although you can certainly ensure your loved one with special needs receives money and assets through your estate plan, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs.

Public monetary benefits provide only for the bare necessities such as food and housing. As you can imagine, these limited benefits will not provide your loved ones with the resources that would allow them to enjoy an enhanced quality of life.

Fortunately, the government has established rules allowing assets to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI and/or Medicaid, as long as certain requirements are met.

Special Needs Trusts are a critical component of your estate planning if you have disabled beneficiaries you wish to provide for after your passing. Generally, Special Needs Trusts are either a standalone trust funded with a separate asset, a sub-trust in your existing Living Trust, or a Testamentary Trust in your Last Will & Testament.

The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s eligibility such as:

  • Annual check-ups at an independent medical facility
  • Attendance of religious services
  • Supplemental education and tutoring
  • Out-of-pocket medical and dental expenses
  • Transportation (including purchase of a vehicle)
  • Maintenance of vehicles
  • Purchase materials for a hobby or recreational activity
  • Funds for trips or vacations
  • Funds for entertainment such as movies, shows or ballgames
  • Purchase of goods and services that add pleasure and quality to life: computers, videos, furniture, or electronics
  • Athletic training or competitions
  • Special dietary needs