What Can A Special Needs Trust Pay For?
Special Needs Trusts hold funds that can be used for a person who has a disability. People who have special needs are often eligible for two main government benefits – Supplemental Security Income (“SSI”) and Medicaid. Both benefits require the recipient to have less than $2,000 in assets to preserve eligibility.
Parents can set aside assets to be used for their disabled child’s needs by using a Special Needs Trust. The trust can then pay for a wide variety of services, items, education, recreation, medical expenses, living expenses and comforts that government benefits do not. For example, as a part of parents’ estate plan, they can give their child’s would-be inheritance to a special needs trust created for that child without violating the $2,000 asset threshold limitation.
There are different types of special needs trusts, depending on the source of the funds, when the trust needs to be established, and if others (besides the parents) wish to contribute to the trust (such as grandparents). The most commonly known special needs trust is a “third party” special needs trust; less commonly used is a “first party” special needs trust.
Special needs trusts are an important layer of financial security for the individual with a disability. Both SSI and Medicaid have complicated rules that must be incorporated in the trust document, and the trust itself must be administered carefully in order to avoid special needs trust violations. This is why working with an Illinois Special Needs Trusts Attorney is so important. Contact us to schedule a consultation to discuss your specific needs and we will reach out within 24 hours.