What is a special needs trust?
A special needs trust, also called a supplemental needs trust, is used to provide mentally or physically disabled beneficiaries with money without them losing their eligibility for public assistance (such as disability, Social Security, etc.). A special needs trust created by an attorney helps provide benefits above what the beneficiary receives from the government.
However, it has limitations. It only allows the beneficiary to buy non-support items through a trust fund. If a beneficiary uses the trust to pay for support items, they can lose their eligibility for public assistance.
Non-support items include anything the beneficiary wants for personal use and is not considered food or shelter. Because utilities such as gas and electricity are considered support items, a special needs trust cannot be used to pay for these expenses.
However, cable and telephone services are not considered basic needs and can be paid for using money from the special needs trust. Because the difference between support items and non-support items is not always so cut-and-dried, one of our attorneys can answer any questions you may have.
A special needs trust can be created before the beneficiary reaches 65 years of age. The trust must also have special language, which is why it is helpful to have an attorney who is skilled in estate planning draw up the document. Sometimes repayment is required to some funding sources, but a properly drafted special needs trust will address this issue.
If you are considering a special needs trust for a disabled loved one, you can benefit from the legal help of an experienced attorney. Unruh Turner Burke & Frees has several lawyers who can help you with your trust and estate planning needs.