Special Needs Planning.

If you are injured or disabled, or if you are the parents of a child with special needs, you do not want an inheritance, an award, or a settlement to threaten your entitlement to public benefits. If assets are given, bequeathed to, or awarded to an injured or disabled person, their entitlement to public resources may be lost or reduced. Individuals with disabilities frequently need to avoid the loss of public resources such as Supplemental Security Income (SSI) or Medicaid which otherwise would be available to them.

Oast & Hook can help you maintain your eligibility for public benefits while enjoying the inheritance or settlement to which you are entitled.

Frequently a Supplemental Needs Trust can assist in the preservation of both the public benefits and the assets. A Supplemental Needs Trust is often referred to as Special Needs Trusts. There are two distinct types of Special Needs Trusts (SNTs): a third party created trust and a self created trust.

Third party created SNTs can be created through the mechanism of something known as an inter vivos or testamentary trust and are funded by some one other than the beneficiary or his or her spouse. They also can be created through a testamentary trust and funded by the beneficiary's spouse. The third party created SNT provides for fully discretionary supplemental care, not a support trust. Third party created SNT's are frequently used to provide for children or spouses with disabilities.

A self created SNT can help an injured or disabled persons address their financial needs beyond what is provided through Supplementary Security Income (SSI) and Medicaid benefits.

Congress created two types of SNT's that can be funded with the beneficiary's assets. These trusts are called d(4)(A) and d(4)(C) trusts. These trusts permit the retention of a beneficiary's resources, including inheritances and personal injury settlements, without disqualifying the beneficiary from receiving SSI or Medicaid.

A special needs trust will manage resources for the benefit of an injured or disabled person while maintaining the person’s eligibility for public assistance benefits. While governmental agencies recognize special needs trusts, they impose very stringent rules and requirements. It is vital that any family considering a special needs trust consult an experienced Special Needs attorney.

Both third party created and self created SNTs provide benefits to a beneficiary who also receives SSI or Medicaid support and are intended to preserve eligibility for those benefits, but to avoid disqualification, beneficiaries may not retain the right to revoke the trust or direct the use of the trust assets for their own support or maintenance.

In addition to creating the trust, it is extremely important that families consider how a trust can be adequately funded. Funding must be realistic in relationship to the injured or disabled person's needs. If a family has insufficient resources to adequately fund a trust, one option may be to consider funding with life insurance.

An SNT must have a trustee who will properly manage the trust assets. The choice of the trustee is a critically important decision. In most instances, a family member will be designated as the trustee. Oast & Hook can assist family members who are trustees, or can serve as a trustee if so desired.