If you or a loved one has a disability and receive financial assistance, or may be entitled to financial assistance, from the government because of the disability, you need to be aware of special needs trusts. Government programs such as Supplemental Security Income (SSI), which is administered by the Social Security Administration, or Medicaid, which is administered through Florida Department of Children and Families, are both need-based programs. If a person receiving financial assistance through a needs-based program receives assets that cause the recipient to exceed asset limits of the program, the recipient will lose their benefits and may even be forced to pay back the government for benefits received while ineligible. Creating a special needs trust, and funding it with the new assets, however, can prevent the loss of financial assistance.
Two types of Special Needs Trusts (or sometimes referred to as Supplemental Needs Trusts) exist. One type is used when funding the trust with a disabled person’s own assets (a self-settled special needs trust) and the other type is used when someone else’s assets are funding the special needs trusts (a third party special needs trust). The other important aspect about a Special Needs Trust is the use of the right distribution standard, or in other words, what and how the trustee is allowed to distribute money to the disabled beneficiary. Using the wrong type of special needs trust or the wrong distribution standard may cause the trust to be unnecessarily restrictive or, even worse, can cause disqualification from public benefits.
For detailed information on Special Needs Trusts, please telephone, email or fax your request for our Special Needs Trust pamphlet. After reviewing our pamphlet, our office will provide you a free office consultation to answer your questions and assist you in evaluating whether a Special Needs Trust is appropriate for you or your family member.