If you have a loved one with a disability, you understand how crucial government benefits like Supplemental Security Income (SSI) and Medicaid or MassHealth can be to their financial security and well-being. These programs often provide essential income and coverage for medical expenses. However, many families are concerned that leaving an inheritance or giving gifts to their disabled loved one might jeopardize their eligibility for essential benefits.
The good news is that through special needs planning, you can provide for your loved one’s future without risking their access to vital government programs. One of the most effective strategies is establishing a special needs trust (SNT).
What Is a Special Needs Trust?
A special needs trust, also referred to as a supplemental needs trust, is a powerful estate planning tool designed to preserve government benefits for individuals with disabilities while providing additional financial support. Unlike direct gifts or inheritances, which can disqualify a beneficiary from needs-based programs like SSI or MassHealth, funds placed in an SNT do not count as assets for eligibility purposes.
The trust can cover expenses that enhance the beneficiary’s quality of life, such as personal care, uncovered medical and dental costs, educational opportunities, recreational activities, and even vacations. These funds ensure that your loved one’s needs are met beyond the basics provided by government benefits, offering them a better quality of life.
Types of Special Needs Trusts
For families planning ahead, a third-party special needs trust is the most common type of SNT. This type of trust is funded by assets belonging to someone other than the disabled individual, such as a parent, grandparent, or other family member. A third-party trust is typically included in the grantor’s estate plan to ensure that the disabled loved one is cared for when the grantor passes away.
Some key features of a third-party special needs trust include:
- It can be created for a beneficiary of any age.
- It may be revocable or irrevocable, depending on the family’s preferences.
- The grantor retains control over selecting or changing trustees and naming remainder beneficiaries who will receive leftover funds after the primary beneficiary’s death.
- The remaining funds in the trust do not need to be used to reimburse the state for care provided to the beneficiary.
This flexibility allows families to tailor the trust to meet their specific needs and goals, ensuring their loved one is well cared for now and in the future.
How a Special Needs Trust Protects Benefits
A special needs trust can make a transformative difference in the life of a disabled loved one by preserving their access to essential government programs such as SSI and Medicaid. Without such a trust, an inheritance or financial gift could exceed the asset limits for these benefits, potentially leading to the loss of crucial support.
Establishing a special needs trust allows families to provide financial resources that are carefully managed and distributed to meet the beneficiary’s specific needs. This arrangement ensures eligibility for government assistance is maintained while enhancing the individual’s quality of life with supplemental support.
Since the value of government benefits over a lifetime often surpasses the worth of an inheritance, creating a special needs trust is a vital strategy for families looking to safeguard their loved one’s financial security and well-being.
How We Can Help With Special Needs Planning
At Surprenant & Beneski, P.C., we understand how important it is to secure your loved one’s future without jeopardizing their government benefits. Our experienced attorneys have extensive knowledge of the legal requirements for establishing special needs trusts. We draft these trusts to comply with federal and state laws, ensuring they function as intended to protect benefits and provide financial support.
We take the time to understand your unique circumstances and goals, tailoring the trust to meet your loved one’s needs. Our guidance doesn’t stop after the trust is established—we are available to provide ongoing advice to ensure the trust is properly managed and continues to serve its purpose effectively.
Contact Our Southeastern Massachusetts Special Needs Planning Attorneys
Planning for a loved one with special needs can feel overwhelming, but you don’t have to do it alone. At Surprenant & Beneski, P.C., we can help you create a plan that provides financial security and peace of mind for your family. Contact us today to schedule a consultation and learn how a special needs trust can protect your loved one’s future while preserving their access to essential government benefits.
