Special Needs Trusts
What is a Special Needs Trust?
A Special Needs Trust (SNT) is a device set up to provide for the special needs of a disabled person and to ensure that the disabled person with assets over $2,000 is still able to receive S.S.I., Medi-Cal and other government assistance necessary for their health and well-being. Special needs can include medical and dental expenses, medical equipment, training and education, insurance, transportation, but not food and shelter, as that is the obligation of the government. If the SNT is sufficiently funded, it can also provide for vacations, automobiles, real property, modifications to accommodate their disability and other such things necessary for a good quality of life. The disabled person is known as the beneficiary of the trust.
When Do I Create an SNT?
An SNT should be created whenever a person with a qualifying disability has or will receive assets over $2,000 which would disqualify that individual from receiving government benefits. The person who creates the SNT, called the settlor, is most often a family member or close friend. A court can, in some cases, execute the SNT.
Who Manages the Special Needs Trust?
An SNT is managed by a trustee on behalf of the disabled person. Often, the trustee is the parent(s) of the disabled person, another close relative or a friend. A professional trustee can also be used. It is important to have a trustee who is financially savvy, and most importantly, ethical.
These are just some of the legal issues that arise when an SNT may apply to your
family situation. We may be able to help if you have further questions regarding
establishing and administering an SNT.