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Long-term and end-of-life care are expensive. The costs can be even more exorbitant when a person is disabled. To avoid going bankrupt paying for medical costs and other expenses, needs-based governmental assistance programs such as Medicare, Medicaid, and Supplemental Security Income (SSI) are a must. These programs carry specific requirements, including strict limits on the income and assets of a beneficiary. If you have a loved one with special needs and you would like to care for them, but you are worried about jeopardizing their eligibility for needs-based assistance programs, you could benefit from establishing a special needs trust. Continue reading to learn about how special needs trusts can be used to support your loved ones without ruining eligibility for government programs, and reach out to a knowledgeable West Palm Beach Medicaid planning and elder law attorney with any questions.
A special needs trust (SNT) is an estate planning tool designed for helping a loved one cover basic expenses without affecting their eligibility for needs-based governmental programs. An SNT is a type of trust, which means that a party will put funds into an account to be administered for the benefit of a beneficiary. Funds will be retained and invested or disbursed to the benefit of the beneficiary under appropriate and designated circumstances. Beneficiaries are typically not responsible for managing the trust or dictating the disbursement of the funds therein. SNTs have certain requirements to be effective, including that the trust beneficiary has only limited, specific access to the funds.
Special needs trusts fall into two general categories: third-party and self-settled. Self-settled trusts involve putting funds into a trust for the benefit of the person funding the trust. A disabled person, for example, could put money in a self-settled trust in order to provide themselves with regular income down the line without ruining their chance at obtaining Medicaid. A third-party trust, on the other hand, is established for the benefit of someone other than the person funding the trust. A parent with a disabled child, for example, could establish a special needs trust to provide their child with additional funds.
Special needs trusts are generally meant to enhance the quality of life of the beneficiary without affecting their chances of obtaining governmental assistance. SNTs typically supplement what Medicaid or SSI don’t cover. SNT funds may be used to pay for the following items, just as an example and can pay for much more:
A Medicaid planning and special needs trust attorney at Shalloway & Shalloway can help protect your family, creating an estate and special needs plan tailored to your needs and circumstances. We will evaluate your situation to determine the best type of will, trust, and other legal mechanisms available to benefit your family the most. Contact the dedicated and professional West Palm Beach estate planning attorneys at Shalloway & Shalloway at 561-686-6200.