A Special Needs Trust — or Supplemental Needs Trust — is created to benefit an individual with a disability and hold an unlimited amount of assets for his or her benefit. A Special Needs Trust is designed to supplement government benefits such as Supplemental Security Income (SSI), Medicaid, subsidized housing, and rehabilitation programs. It can also provide for extra care above and beyond what the government provides.
My disabled family member received a personal injury settlement. Can that be transferred into a Special Needs Trust?
Yes. In fact, it is advised that these assets are placed into a Special Needs Trust so the disabled family member can still receive government benefits and participate in government rehabilitation programs.
If my family is wealthy, why would we need a Special Needs Trust for a disabled family member?
Even if your family is wealthy and has assets to support the disabled family member, it may be beneficial to create a Special Needs Trust so your disabled family member can take advantage of specialized benefits and programs the government offers. Special Needs Trust funds are also protected from creditors and judgments, so if the disabled family member is ever sued, his or her trust assets would be protected.
When should a Special Needs Trust be created?
A Special Needs Trust should be created as early on in the disabled family member’s life as possible.
If my disabled family member receives government benefits, is there a repayment obligation?
Assets that were transferred to the Trust and originally belonged to the disabled person may be subject to repayment. However, assets that were transferred to the Trust by the parents or another third party are not ordinarily subject to repayment obligations. Assets that were transferred to the Trust by court order as a result of a personal injury settlement or judgment also are not subject to repayment obligations.