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You May Need a Special Needs Trust

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Lori Murphy
BKK Wills, Trusts and Estates Newsletter
August 2009

Does one of your children have a mental or physical disability? Has your child received public benefits in the form of Medicaid, Social Security or Supplemental Security Income (or could receive public assistance in the future)? Do you want to ensure that this child receives some of the benefits of your hard work and savings?

If so, you may consider establishing a special needs trust for your child. The goal of a special needs trust, often referred to as a supplemental trust, is to provide for the care and support of the beneficiary without impacting that beneficiary’s receipt of public benefits. This is a key consideration, since a beneficiary may be ineligible for public assistance based on need if the beneficiary’s assets exceed $2,000.

In a special needs trust, a named trustee is directed to provide for the needs of the special needs beneficiary without reducing public assistance. Specifically, a trustee is instructed to limit payments for items that are typically covered by public assistance. Instead, a trustee is instructed (and has the power) to pay for the beneficiary’s expenses such as educational training programs, periodic evaluations, personal coaches, and private caretakers. For example, a child with autism may be able to function in the society quite well if he receives personal coaching and special occupational opportunities. Further, since special needs beneficiaries often need to be accompanied on vacations or trips, a trustee is able to pay for the companion as well.

These are considerations that are not addressed by a simple will or a regular trust. Since there are different types of special needs trusts, it is important to speak with your attorney about options appropriate for your personal family situation.