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Special Needs Trusts: Protect Your Disabled Loved Ones

A special needs trust (sometimes called a supplemental needs trust) benefits adult children with disabilities or special needs.  When properly arranged and administrated, a special needs trusts allows an adult child with disabilities to be the beneficiary of a trust without impacting his or her eligibility for government programs like Medicaid and Social Security Income.  In order to provide your child with a special needs trust, a trustee needs to be appointed and provided with total control of the trust asset distributions.

Robert and Cheryl’s Story: Including a Special Needs Trust in Estate Planning

Robert and Cheryl’s 20 year old son, Matthew, has autism and is dependent on them for his day-to-day care.  Matthew is not receiving government assistance at this time because Robert and Cheryl are able to give him the support he needs.

It is very important to Robert and Cheryl that Matthew is properly provided for once they are gone.  They have decided to include a special needs trust in their estate plan to give them the peace of mind that he is cared for medically and financially after their passing.  With the help of their estate planning attorney, Robert and Cheryl set up a special needs trust for Matthew’s benefit and designated the special needs trust as the beneficiary of a second to die life insurance policy, with Mary, a close family friend, as Trustee.  The trust provides Mary with complete discretion regarding distributions of income and principal for Matthew’s benefit.

Once both Robert and Cheryl pass away, their life insurance policy will pay a death benefit out to the special needs trust and Matthew will then be able to receive a distribution of funds that will help to support him financially.  Because of Robert and Cheryl’s careful planning, the trust ensures that Matthew will still be eligible to apply for support from government programs like Medicaid or Social Security Income after they pass away.

Robert and Cheryl have peace of mind and are comforted in knowing that Matthew will be protected by the special needs trust and knowing that his financial and medical needs will be provided for in the future. 

Careful Planning

Like Robert and Cheryl, it is important to plan carefully for the future when it comes to providing for children or grandchildren with special needs.

If you have a child or grandchild with physical or mental disabilities, there are particular challenges when it comes to ensuring that they are eligible for government financial assistance after they turn 18 years old.  While income and assets are not counted when determining Social Security retirement benefits for adults in their sixties, a person with special needs becomes ineligible for Supplemental Social Security Income if he or she has more than $2,000 in resources.  Even giving monetary gifts to your loved one with special needs could negatively affect his or her eligibility for government assistance programs.

An Estate Planning Attorney can assist you in the creation, funding and administration of a special needs trust.  Working with an attorney to set up a special needs trust ensures that funding is made available for your child’s future after your death and that the trust is set up properly so the inheritance does not affect your child’s eligibility for Medicaid and Social Security Income. 

A Few Things to Keep in Mind about Special Needs Trusts:

  • A special needs trust can allocate an unlimited amount of assets for your loved one with special needs which aren’t counted when being considered for government benefits
  • To prevent jeopardizing the beneficiary’s eligibility for these government benefits, you must provide an appointed trustee with complete control over the distribution of the benefits to your child
  • A special needs trust must be irrevocable.  Amendments to or termination of a special needs trust can only occur under specific circumstances provided for in the trust itself

Fingeret Law Special Needs Trust Attorneys in Pittsburgh can help protect your disabled loved one:

To discuss your specific needs and find out how our special needs trusts attorneys in Pittsburgh can help you, please call us at Fingeret Law at 412.281.8222 or contact us online.


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