Tag: disabled person

Special Needs Trusts

Special Needs Trusts

Special needs trusts are set up to allow people with special needs to qualify for or maintain “needs based” government benefits such as Medicaid and Supplemental Security Income (“SSI”). In general, eligibility for these programs require that a persons assets held in a special needs trust will not be seen as “countable” for Medicaid and SSI eligibility. However, those assets held in the trust can still be used to supplement needs based government benefits and provide many of the good things in life such as electronics, companionship, vacations, hair care, dental, education, etc…

Two Types

Self settled is when a person sets up their own special needs trust for their own benefit.

Third party is when someone sets up a special needs trust for someone else.

Basic Rules

There are specific requirements for each of the types of special needs trusts, however they should follow the following rules.

  • Trustee shall only supplement government benefits and never displace government benefits.
  • The Trustee shall not distribute cash or property directly to the beneficiary
  • The beneficiary may not demand payment or that assets be distributed to the trust.
  • Never give the disabled beneficiary a general or limited power of appointment.
  • Trustee shall not make any distributions that would disqualify the beneficiary from needs based government benefits
  • Trust assets are not available to the beneficiary
  • Trustee shall not allow beneficiary to co-mingle funds with the trust assets.
  • The trustee shall not reimburse the beneficiary directly for purchases he or she makes.
  • The Trustee may pay directly for services, provided the Primary Beneficiary does not receive any assets as a result of such expenditure that can be converted to cash.
  • The Trustee may distribute a gift certificate directly to the Primary Beneficiary if the certificate is nontransferable and nonrefundable and cannot be converted to cash.

If you have a situation where you think a special needs trust would benefit you please contact us at 435-674-2564 and ask for Travis Christiansen.

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