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David Toback, Attorney at Law
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When to Consider a Special Needs Trust

If you or someone in your family is disabled, or has any kind of special need, you may want to consider a special needs trust (SNT). An SNT can be crucial to protect government benefits, and to ensure that people get the continuing care that they need in the future.

Why Use a SNT?

The need for a SNT comes from the ability to obtain and keep government benefits for those with a disability. Often, Medicaid and Social Security Disability are the only ways that the disabled can get the care, therapy, or treatment that they need. But Medicaid and Social Security are need-based—should a disabled person’s income or assets get too high, the benefits could be lost.

This is of special risk to those who may inherit funds, who have injury settlements, or who may for any reason anticipate a lump sum payment in the future. They risk having to use those assets for the medical care that Medicaid will no longer cover.

A SNT will allow funds to be used for the benefit of the disabled individual without jeopardizing the government benefits.

The Kinds of SNTs

Most SNT are set up by third parties—often, parents of a disabled child, or the spouse of a disabled husband or wife. The trusts are often funded with the third-parties’ assets. So long as the money isn’t accessible by the disabled person without the trustee’s permission, the property will be considered protected by the SNT.

Money in a SNT generally must be earmarked for use towards things like therapy, medications, medical devices, in-home care, home furnishings, clothing or generally any item other than food or shelter. That means that the SNT cannot set up cash distributions to the disabled individual.

Someone can set up a SNT for themselves, with their own funds or property, without contribution by any third party. This is often the case when someone expects an inheritance or settlement. It can also be used where someone has assets before suffering disability, and wants to protect their ability to get public benefits in the future.

But these trusts have more restrictions, and often will include a provision whereby Medicaid will be paid back with any assets remaining after the death of the disabled person. Many trusts set up by the disabled individual also must obtain court approval.

While setting up a trust for yourself does seem more difficult and restrictive than having a third party do it, it’s certainly better than having no trust at all.

All SNTs can be revocable or irrevocable, depending on the language of the trust. However, the general rule with all trusts is that the more a trust is irrevocable, the greater legal protections it will have from creditors.

Make sure your loved ones, especially those who may have special needs, are protected, and that they will get the care they need going forward. Contact Tampa business and probate attorney David Toback to discuss your needs and make sure you understand how to best plan all areas of your estate.

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