Who is Eligible for a Special Needs Trust?

• Jul 15, 2022

Special needs trusts can meet a variety of goals. It can provide funds for family members who cannot care for themselves.

While the funds in a special needs trust are available to a disabled individual, the individual does not own those funds. Thus, a family member with a disability can qualify for government programs like Supplemental Security Income (SSI) or Medicaid, based on wealth and income, and still enjoy the benefits of the money in the trust.

Some types of property, like a car or a residential house, will not affect eligibility for SSI or Medicaid. However, cash and other types of investments can make a person ineligible for benefits.

The special needs trust allows a beneficiary to qualify for government benefits by separating the ownership and control of the property. The trustee cannot give the beneficiary the money directly but can spend the money on expenses of the individual with special needs, like utilities, other bills, food, or clothing. This extra support can mean the difference between living in poverty and modest comfort.

Special needs trusts can also provide money for family members who are incapable of managing money independently, either from mild developmental disabilities or because of improvidence. This form of special needs trust is often called a “spendthrift” trust.

If you believe one of your family members or loved ones may benefit from having a special needs trust NY or NJ, contact a New York or New Jersey special needs lawyer. Seek a consultation to assist you in creating a special needs trust that will suit your needs.

Permanent Special Needs

A person with permanent special needs is eligible for a special needs trust. Such a trust usually ends when the beneficiary dies.

If individuals with permanent special needs can manage their own affairs and have Medicare or Social Security Disability Insurance (SSDI) income, a special needs trust may not be necessary. Those government programs do not depend on income to confer benefits.

On the other hand, there are means tests to qualify for Medicaid and Supplemental Security Income (SSI). If the individual with special needs may be eligible for either program, a special needs trust can provide extra income or comfort.

Temporary Special Needs

A person with temporary special needs is also eligible for a special needs trust. One typical example might be a trust set up for an orphaned child. Once the child turns 18, the trust dissolves, and the child can manage his own affairs.

Similarly, a person with a temporary medical condition may benefit from relieving the burden of managing their affairs. A special needs trust of limited duration can help them.

What if the Person with Temporary Special Needs Recovers?

A person with temporary disabilities may not require a special needs trust for the rest of their life. Many trusts anticipate such a possibility and include a provision allowing the trustee to terminate the trust if the person with the temporary disability recovers sufficiently to manage their own affairs or no longer needs the other benefits a trust can provide.

Similarly, a person with a deteriorating medical condition now may be able to manage their own affairs at the moment but may need assistance with management in the future. Drafting a special needs trust to cover this situation is a little more complicated, as the drafter must anticipate future possibilities. However, the situation is not uncommon, and dedicated trust and special needs attorneys can help craft the exact language needed.

The Falcon Law Group has extensive experience as trust and special needs lawyers NJ and NY. Their staff of considerate, compassionate professionals can assist you in crafting a special needs trust that will protect your loved ones and ensure the intended use of the money you provide for their care and maintenance. Call or email them today for a consultation.