Weekly Newsletter – Special Needs Trust: Protection for Those Who Need It the Most

Lori SomekhUncategorizedLeave a Comment

Special Needs Trust:  Protection for Those Who Need It the Most

Families of those with disabilities – physical or mental – are typically concerned with the best way to fund the long-term financial and personal needs of their special needs loved one in a way that will secure a fulfilling life for them. The best vehicle to accomplish this goal is known as a Special Needs Trust (SNT).

A SNT can be customized to the special circumstances of each family facing the need to secure the future of a disabled family member, while keeping their access to government benefits like Medicaid and Supplemental Security Income (SSI) intact.

In fact, the best planned SNT will maximize the use of both private and governmental resources to benefit your disabled loved one.  Families can use their personal assets to provide for quality of life enhancements like education, training, vacations, hobbies or pets as a secondary source of support to supplement government benefits to meet the basic needs of a disabled family member.

Types of Special Needs Trusts

The most prevalent type of SNT is the first-party SNT, which are funded with the disabled person’s own assets and designed to serve as a supplemental resource after government benefits have been exhausted. The assets placed into a SNT are not considered “available resources” for purposes of qualifying for government benefits. If there is money left in the SNT when the person dies the government is entitled to be repaid from the trust.

Another type of SNT is a third party SNT. This is a SNT that is funded with someone else’s assets (such as a parent’s). This type of SNT is used in the same way as a first-party SNT, but the government is not entitled to be repaid from the balance remaining in the trust after the beneficiary’s death.

Establishing a SNT

To establish a SNT, the beneficiary must be disabled according to the guidelines established by the Social Security Act – i.e., unable to support themselves due to a disability – and also be under the age of 65 when the SNT is established.

If the disabled person is over 65, a “pooled” SNT in which numerous disabled parties participate, is an option. Several states as well as charitable organizations make pooled SNTs available for this purpose.

A trustee must be named for the SNT, and not all jurisdictions allow for family members to serve as trustees. In this case, a professional trustee such as a trust company or bank may be used to perform the fiduciary duties of the SNT.

We can help you and your family plan for the future financial security of a special needs family member. Call our office today to schedule a time for us to sit down and talk about a Family Wealth Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

This article is a service of Lori R. Somekh, Esq., Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Somekh & Associates, PLLC,
247-67 Jericho Tpke., Bellerose, NY 11426;
(718) 740-3300

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