Improve your childs life with a Special Needs Trust

What are special needs trusts for?

Many people, maybe 10% of Americans, are touched by a disability of their own or someone they love. The disability can be from Down’s syndrome, autism, a traumatic brain injury, mental illness or other causes.

For families dealing with this, estate planning becomes especially important because they would like to take care of the special needs person while making sure that eligibility for government benefits continues. If this person inherits any money, the eligibility is gone.

Sometimes parents exclude this child from inheriting, or count on another child to receive some money and use it to assist the special needs person, but unexpected events, a lawsuit or divorce, can use this asset in a way not intended by the donor.

While the medical benefits of governmental assistance (Medicaid) can be essential, the cash limitations can leave the loved one in poverty. Most people living independently on SSI monthly benefits are below the poverty level.

We can help shelter some funds for your special person's care in the future.

What can the federal government do for you?

The federal government provides some additional assistance with very strict regulations and the federal government has established regulation regarding Special Needs Trusts, or SNT, for the purpose of supplementing the benefits which are available.

Since state benefits are under the federal regulations, compliance with these federal regulations are the key to successfully helping your special needs family member, and keeping them eligible for both state and federal benefits.

The SNT may legally supply funds to supplement the needs of your disabled family member, but it must not be owned or controlled by him. It cannot pay for his “support or maintenance” expenses.

It cannot receive his disability income or pay his routine bills. To avoid fraud, regulations are extremely specific as to what the trust may NOT be used for, and if incorrectly written, the SNT can do more harm than good by being considered an asset of the disabled person, thus ending his eligibility. 

If done correctly, the SNT can provide discretion to a trustee to provide comforts which greatly improve the quality of life for that loved one, define the rules of what the SNT may be used for, provide for a succession of trustees as needed, provide for the person’s final arrangements, and protect the funds against creditors.

The amount put into the SNT is up to the donors, and others can contribute later on as well. Although an SNT may seem intimidating, this is worth considering to take care of your disabled family member, and we are people to help you with accomplishing it for a person you care about.

We can assist a family trustee in following the SNT document and provide resources for questions that arise. For small sums of money, the State of Washington has established a low-cost pooled trust called a DDLOT. Contact us to learn more.