Legal & Planning Services: Supplemental Needs Trusts.

Supplemental Needs Trust

A supplemental needs trust (also known as a special needs trust) is designed to support a disabled beneficiary. A supplemental needs trust is drafted to protect the beneficiary’s eligibility for government benefits while also allowing him or her to receive funds for education, recreation, gifts, and other items that the benefit(s) will not cover.

Currently, individuals with disabilities are disqualified from most federal assistance, including Supplemental Security Income (SSI) and Medicaid, and may be disqualified from state public assistance as well, if they inherit more than $2,000. The supplemental needs trust, created by a parent or other family, with assistance from Hook Law Center, may be set up in a will as a way to leave an individual assets, or can be set up by the individual as a “self-settled” trust, if for example, someone has been disabled due to an accident or medical malpractice, as a way to receive the proceeds of a settlement or a personal injury award.

How will my supplemental needs trust affect access to pubic benefits?
A supplemental needs trust can hold cash, personal property, real property, and stocks, and can be the beneficiary of a life insurance policy. The supplemental needs trust can help parents establish and coordinate their estate plans and ensure that their child will be provided for when they are gone.

A supplemental needs trust is not designed to replace the basic support that is provided by Medicaid and Supplemental Security Income (SSI), but is put into place for additional items (“special needs”) not otherwise covered.

Choosing a trustee is an important part of designing the trust. The trustee overseeing the supplemental needs trust should use his or her discretion when distributing funds so as not to jeopardize the beneficiary’s eligibility for needed government benefits. Responsibilities may include some or all of the following: paying bills, making smart investments, managing accounts, and preparing tax returns. A trustee should be ethical, financially-savvy, and level-headed.

The attorneys at Hook Law Center are experienced in designing supplemental needs trusts. Each trust should be tailored to the individual needs of a family. An attorney with little-to-no supplemental needs trust experience may not adequately customize the trust and ensure that the benefits intended for them are fully covered.

Hook Law Center can assist you in designing a supplemental needs trust — one of the most important things you can do to help protect your child’s future.

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