If someone in your family has a disability, he or she may be incapable of working. Fortunately, government assistance programs may provide medical care, basic income or other support. Public programs do not usually offer much else, unfortunately.
Special needs trusts provide beneficiaries with access to money they may use on certain expenses. Even better, because these trusts hold funds for the benefit of the disabled person, disbursements usually do not count as income for purposes of qualifying for needs-based benefits.
Using public assistance funds
If your disabled relative qualifies for government assistance, he or she probably may use funds only on basic living expenses. These include groceries, rent, utilities, transportation and related expenses.
Using special needs trust funds
Disbursements from the special needs trust must not go to these same expenses. If they do, your loved one may have too much income to qualify for public benefits. Still, funds from the special needs trust may pay for expenses that improve your relative’s quality of life.
These may include the following:
- Uncovered medical, dental, therapy and rehabilitation expenses
- Training, education, hobby and recreational expenses
- Technology, equipment and computer expenses
- Insurance expenses
Protecting your loved one’s interests
Your loved one has an interest in both continuing to qualify for government assistance and accessing essential services. The special needs trustee, the individual who oversees the trust, has a fiduciary obligation to protect these interests.
While there are many estate planning tools that may help you protect your disabled family member, a special needs trust is certainly worth considering. After all, this type of trust may allow your loved one to enjoy life while getting the most out of his or her public assistance.
Below is a financial guide that breaks down the exact steps parents need to take before and after their child turns 18 years old to promote and support an adult child’s independence and financial future. This financial guide breaks down how to set up tools, trusts, and resources that help provide a child with long-term financial security, even if they are unable to earn a living on their own.
https://www.creditcards.com/credit-card-news/financial-guide-for-adult-children-with-disabilities/