The special needs trust is for those people who want to leave property, assets or money to beneficiaries who are disabled. It is a valuable tool to ensure the eligible beneficiary still receives Medicaid Benefits and SSI (Supplementary Security Income). It is a far better option to consider as compared to leaving cash.
Leaving any amount of money in the bank as a gift to a loved one who is disabled can make them ineligible to receive SSI. Such a misfortune can be avoided by leaving your funds in a special needs trust instead of a bank. The trustee that is chosen will need to be very discrete with the contents of the trust; otherwise the terms stand to be declared null and void if they are disclosed to any other party. It should be noted that all the authority over the money or assets that are left in the trust will be handed over to the SSI or to Medicaid.
The trust ceases to exist when the beneficiary dies or there is no more money in the trust to distribute. It’s also important to bear in mind that the trustee can’t offer money directly to the beneficiary as this will jeopardize their eligibility for SSI and Medicaid. The trustee is allowed to buy a number of assets that can be beneficial to the disabled beneficiary. This can include any equipment that will increase the amount of convenience they experience in their life. It can also include education, physical rehabilitation, vacations, dental expenses and personal care attendants, among many others.
On a related note, a pooled trust will come in handy for a situation where there is not a suitable candidate to act as a trustee. It is still a special needs trust, but in this case it is run by a non-profit organization. Their main responsibility is to gather funds from families and create a separate account for each beneficiary. The organization then selects a trustee on behalf of the beneficiary who then represents them.
A special needs trust is an avenue to explore for anyone with a child with special needs. It may seem like a complicated process, but with the right team of professionals it can create a very efficient way to transfer assets so the beneficiary with the special needs has the proper care.