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Special Needs Trusts

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Special needs trust are documents that are put into place to protect anyone who’s disabled. They can be part of a “total package” approach that goes with that person’s will and estate plan, or it can a single document serving a single purpose.

The Intricacies of Special Needs Trusts

Many are unsure of what kind of attorney handles a special needs trust, and the answer is found with estate planning attorneys. These lawyers are well-versed on the various laws and regulations surrounding special needs trust, including asset protection, power of attorney considerations and Medicaid related dynamics. It’s important a family choose an attorney who specializes in these fields. Otherwise, there could be loopholes left open and for matters concerning the U.S. government, those loopholes can mean big problems.

A special needs trust that doesn’t cover the bases in their entirety can result in:

  • a loss of benefits
  • legal repercussions – including the potential for lawsuits
  • criminal charges in some instances

Benefits Systems

The benefits system for disabled family members are both intricate and sometimes even confusing. One thing is for sure: one small error can result in big problems that are difficult to reverse. That’s just one more reason why the legal representation you choose should include specialized services for special needs trusts. The ones who are current with the benefits, the legal foundation for creating the trust, and one who knows how to avoid the potential pitfalls are the ones you should be considering.

It’s important for a person with physical or mental disabilities to have the right representation who can create a complete and accurate trust. They should expect one who can set up the benefits for SSI, Medicaid, potential vocational rehabilitation, housing and any other benefits that may be available to them. Ask the attorney if he knows the limit for one being declared legally impoverished. Does he know which programs his client may have available aside from the traditional government benefits? Does he know how to establish the trust with its own unique identification number that’s issued by the Internal Revenue Service?

Congress was very careful when it allowed for these trusts in the mid 1990s. They must include acknowledgements and provisions for termination or dissolution of the trust and they must also include definitive guidelines for necessary amendments.

The Purpose of Special Needs Trusts

The law is specific for the uses of these trusts. They can be used, according to federal law, “supplemental and extra care over and above what the government provides.” They must be created with a “sliding scale” foundation so that if the government is able to provide for every need, then the trust won’t be used. If, however, the government is unable to meet the needs of the disabled person, then his trust kicks in to cover it. Most incorporate the use of both.

Medicaid has specific guidelines as well and the attorney you’ve chosen to oversee the special needs trust must understand those guidelines and ensure compliance. Everything from housing and food to making necessary changes to a disabled person’s home is addressed under these rules.

Finally, it’s important to remember that the trusts are designed to ensure a disabled person has access to what he needs, but it goes a bit further. Vacations and some entertainment is provided, as well.

Have questions about special needs trusts or would you like to explore your options? Give our Medicaid attorneys a call today. There’s much more that goes into determinations and meeting with our legal team provides you the opportunity to better understand all of those details.

Stephen Unsworth
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