A Special Needs trust is typically created for individuals who have special needs like the elderly, those with disabilities, or children/adults with special needs. This type of trust allows the individual to build financial security by having assets stored away. Allocating resources can help family members find comfort in knowing their loved one will be able to live a fulfilling life.
What is a Special Needs Trust?
A Special Needs trust is also referred to as a Supplemental Needs Trust, or an SNT. This trust protects funds for an individual who has special needs and helps preserve their eligibility for government benefits like Medicaid, community programs, disability, and etc. Assets in a SNT can help cover essentials required by your loved one that public benefits may not cover. The funds in the trust can also be used to allow the person to enjoy recreational activities or buy home furnishings.
What is the Different Between a First Party SNT and a Third Party SNT?
A Supplemental Needs Trust can be a first-party SNT or a Third party SNY. A first-party SNT is established using assets that already belong to the individual. Conversely, a third-party SNT is established using gifts made to the individual from a third-party such as a family member.
Taking Precautions When Making Gifts to Individuals Who Receive Public Benefits
Family members usually make gifst to a loved one to help them maintain an enriched lifestyle. However, if the individual is receiving government benefits, their eligibility may be jeopardized if the gifts are made directly to them. Gifts made to a person with special needs and who received these benefits, should be made to their Special Needs Trust in order to protect their eligibility for public benefits.
If you have a loved one who has special needs, and you have questions about how you can protect their assets or help them live an enriched lifestyle, contact an experienced estate planning attorney. For more information about Special Needs Trusts, or to speak with an experienced attorney, please contact us.