What is an SNT?

What is a Special Needs Trust? Public benefits provide a safety net to people who are unable to provide for their own care and maintenance due to circumstances beyond their control, such as catastrophic accidents or illnesses. No one wants to be on public benefits. Most of the people who do depend on public benefit programs do so because they require long-term care and medical expenses. However, public benefits provide limited programs. Government funding is not limitless. These programs’ limits create a need to maximize recipients’ private funds while maintaining access to public benefits in order to improve the quality of life of disabled persons or their dependents.

Special Needs Trusts, aka Supplemental Needs Trusts, can be used when a person knows that he or she will become unable to continue the care and support of a dependant. The individual may be a parent of a disabled adult or child who is dependent upon the parent for financial support or care. Or, the person may be concerned that a spouse will be left destitute when that individual is no longer able to work and provide for the spouse. A Special Needs Trust enables qualification for public benefits while preserving assets for the use and benefit of others, such as spouses and disabled dependants.

Who needs a Special Needs Trust? People who have been injured or diagnosed with a chronic debilitating disease worry they will become dependent upon public benefits in order to live. A Special Needs Trust may preserve assets for use to improve the quality of their lives.

At times, disabled individuals sue defendants to recover damages for illness or injury, and their litigation attorneys seek to maintain the proceeds from personal injury suits in the face of staggering medical care costs. In these cases, medical expenses incurred by a plaintiff in a tort suit may force the disabled person to exhaust all personal resources and cause the person to seek public benefits such as Medicaid to help pay for necessary treatment. During the pendency of the litigation all costs of treatment will be covered by the Medicaid program. However, upon the receipt of the settlement/award, the client will lose Medicaid eligibility, and proceeds from the settlement may consumed by huge medical expenses.

In the scenarios above, the ultimate goal of the special needs trust planning is to lawfully secure ‘extras’ while maintaining Medicaid eligibility directly or by qualifying for Supplemental Security Income benefits.

Why is SSI important? SSI is a key to the more important benefits of the Medicaid program. Texas is one of 31 states known as "1634" states. This is the section of the Social Security Act that authorizes Texas to provide Medicaid eligibility to any recipient of SSI benefits. 42 U.S.C. sec. 1383c. A disabled person qualifying for SSI is said to be a “categorically needy” person and as such automatically qualifies for Medicaid benefits in the community. The determination of eligibility for SSI is made by the Social Security Administration and upon receiving eligibility for SSI the applicant is likewise eligible for Medicaid.

Who can help? For more information on Special Needs Trusts attorneys, consult: the National Academy of Elder Law Attorneys at http://www.naela.org/ and the Academy of Special Needs Planners at http://www.specialneedsplanners.com/aboutus.asp

Read more...

Special Kids & Special Needs Trusts

Parents of special needs kids are often not worried about themselves, but they are deeply concerned with how their disabled child may be cared for and maintained when they, the parents themselves, are gone. Sometimes these parents or grandparents will have spent their entire adult lives caring for the needs of a child or disabled adult who has been totally dependent upon them. Elderly individuals may be faced with not only their own catastrophic disease or illness, but they need an estate planning vehicle for providing for their disabled child or loved one.

In these cases, a Special Needs Trust can help. Often the disabled child will already be a recipient of SSI benefits and Medicaid because the disabled child was unable to work for a living due to the disabling condition. The disability may be such that the child will need extensive and costly medical treatment forever. Maintaining eligibility for the Medicaid benefits to cover these medical costs is critical.

Funds available to the parent for care and welfare of the child may be modest, and they might only provide for payment of the medical expenses for a short time. A Supplemental Needs Trust can provide funds for things that the public benefit programs will not provide as well as preserving Medicaid eligibility so that the money is not consumed by expensive medical care. What? Yes, that’s right. A properly drawn Special Needs Trust allows for the lawful qualification for public benefit programs, preservation of assets, and the distribution of these special ‘goodies’ from the trust that would enhance the quality of the disabled child or adult’s life. These ‘goodies’ could include: education, recreation, counseling, medical attention beyond the simple necessities of life. Specifically, things like summer camp, airline tickets for travel, electronic video games, or a television are the little luxuries and comforts that public benefits do not provide.

Special Needs Trusts are set up to comply with all state and federal law. Commonly, they are run by a family member, a trustee (like a bank), or a nonprofit pooled trust. Great care is taken in the choice of appropriate trustees to manage all trust assets, to deal with future replacement appointments, and to comply with all reporting and tax requirements. The trustee’s goal is to make lawful disbursements from the trust that will improve the quality of the beneficiary’s life without disqualifying the beneficiary from SSI or Medicaid. For more information on Special Needs Trusts, see the websites for: the National Academy of Elder Law Attorneys at http://www.naela.org/ and the Academy of Special Needs Planners at http://www.specialneedsplanners.com/aboutus.asp

Read more...