WHAT IS A SPECIAL NEEDS TRUST?
Created by Omnibus Reconciliation Act of 1993 ("OBRA ‘93") - under 42 U.S.C. § 1396p(d)(4), the legislative intent was to enable disabled persons to have their assets sheltered and to supplement government benefits the beneficiary receives.The Special Needs Trust (SNT) is the type of trust you would consider establishing in settlement of personal injury lawsuits, where a severe severe injury/disability requires the injured person to receive government benefits for their remaining lifetime.
Benefits of Establishing a Special Needs Trust:
Even though the government must be repaid after the death of the Beneficiary or termination of the Trust, the Trust is useful for the following reasons: 1.Medicaid will not charge interest on payments made during the Beneficiary’s life and only Medicaid benefits will need to be paid back. 2. The Beneficiary is likely to get medical services at lower rates than if he/she did not have the Trust. 3. The Trust principal can grow and provide a lifeline for future medical care to supplement what the government will not pay for. 4.The client will not be disqualified from SSI or Medicaid for establishing the Trust. 5.If the Trust assets are depleted at the termination of the Trust, or upon the death of the Beneficiary, the government gets nothing. 6.The Trustee acting for the family may purchase medical services and equipment without Medicaid assistance, at regular rates, whenever they elect to do so.
WHO SHOULD HAVE A SPECIAL NEEDS TRUST ESTABLISHED?
Persons who anticipate receiving large settlement proceeds, which funds may be diminished due to the requirement to repay liens, and thus insufficient funds remain to meet future care needs.
Persons (including children) under the age of 65 who are disabled and have limited income to provide for their medical and financial needs for the remainder of their life.
Disabled children over age 18, even though the family has substantial wealth. Since there is no statutory duty to support adult children, the family resources do not count against the child, and thus, the Trust can be used.
QUALIFICATIONS NECESSARY TO ESTABLISH A SPECIAL
NEEDS TRUST:
In order to qualify as a Special Needs Trust, the following elements must be present:
The Trust will contain assets of the beneficiary, and can also be funded by a Beneficiary’s spouse, or the parents of a minor child.
The Beneficiary must be under the age of 65 when the Trust is created
The Trust Beneficiary is disabled as defined under Social Security laws, but does not have to be institutionalized.
The Trust grantor/creator is: The court; The Beneficiary’s legal guardian;The Beneficiary’s parent(s);The Beneficiary’s grandparent(s).
If you have any additional questions or need assistance in establishing a Special Needs Trust, please call my office for assistance at 954-981-6533