Special Needs Trust
Special needs trusts, also known as supplemental needs trusts, are legal arrangements that are used to provide for the care and support of individuals with disabilities. These trusts are designed to allow the beneficiary to receive additional support and resources without losing eligibility for government benefits like Medicaid and Supplemental Security Income (SSI).
There are several rules that apply to special needs trusts, including:
The trust must be established for the sole benefit of the individual with a disability.
The trust must be irrevocable, meaning that it cannot be amended or dissolved once it is created.
The trust must be managed by a trustee who is responsible for managing the assets of the trust and making sure they are used for the benefit of the disabled individual.
The trust assets must be used to supplement, not replace, any government benefits the individual is receiving.
Any assets remaining in the trust after the individual's death must be used to reimburse the government for any Medicaid benefits that were paid on the individual's behalf.
It is important to consult with a lawyer who is experienced in special needs trusts when creating this type of trust, as the rules and requirements can be complex.