Shalloway and Shalloway, P.A.

Disbursements from the Special Needs Trust

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As Trustee, you have sole control of the funds in the Special Needs Trust.  This deliberate delegation of power is the only way that the law allows a disabled person to continue to receive government benefits while being over the allowed asset cap.

All SNT disbursements must be for the sole benefit of the SNT Beneficiary.  The SNT funds cannot be used to buy gifts or to distribute cash as gifts to anyone other than the SNT Beneficiary.  There are effective strategies to have the SNT indirectly release monies to someone other than the SNT Beneficiary, however, we strongly advise that such strategies should only be used after they are discussed with a qualified elder law expert in public benefits.

If the Trust Beneficiary is receiving SSI, keep in mind three (3) important rules regarding disbursements from the SNT: (1) The beneficiary will have a dollar for dollar reduction in Supplemental Security Income (SSI) for cash directly distributed to the beneficiary of the SNT.  Thus, if the amount of the direct cash disbursement is equal or greater than the SSI check, the beneficiary will lose both his/her SSI and Medicaid.  We advise against making direct disbursements of cash to a SNT beneficiary for this reason; (2) Disbursements for food, shelter and utilities paid directly by the SNT to third parties will reduce the Beneficiary’s SSI check by a maximum of one-third (1/3).  However, Medicaid coverage will remain.  Therefore, it may be preferable for the Beneficiary to suffer a one-third (1/3) SSI cash reduction in exchange for having the SNT pay those costs of food, shelter and utilities for the Beneficiary, that the Beneficiary would not otherwise be able to afford; and (3) SNT disbursements directly to a third party for goods and services other than food, shelter and utilities will not reduce the Beneficiary’s SSI.

To learn more about proper usage of the Special Needs Trust, please contact our firm to learn more.

Shalloway & Shalloway, P.A., is located in West Palm Beach, FL and serves clients in Palm Beach, Broward, Dade, Okeechobee, Martin and St. Lucie Counties.

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