Special Needs Trust for Maintaining Medicaid or SSI Eligibility

February 24th, 2014

Parents with special needs children (classified as disabled under the Social Security Act) should consider creating a special needs trust. This type of trust is designed to hold money for the purpose of providing financial support to a special needs individual after his or her guardian dies or becomes unable to care for the child. The trust can be created for either a minor or an incompetent adult.

A special needs trust should be created with the help of an estate planning attorney who understands the challenges that special needs individuals face. Many special needs individuals receive funding through Social Security (SSI) or Medicaid programs, as well as other state aid. It is important that any inheritance provided to the special needs individual does not interfere with or disqualify them from receiving Medicaid or other benefits.

What Can a Special Needs Trust Pay For?

A special needs trust is an excellent way to make sure that your loved one benefits from your inheritance while maintaining their current Medicaid or SSI eligibility. Creating an effective trust requires careful language and structuring of finances.

A special needs trust can be used for:

  • Caregiving and supplemental medical care;
  • Medical devices Nursing care;
  • Developmental services;
  • Recreation;
  • Dental care;
  • Therapy;
  • Social opportunities;
  • Respite care;
  • Pet care; and
  • Hobbies;
  • Computers, clothing, and furniture;
  • Legal services;

Although the spending of trusts can be quite broad, it generally may not be used for food or shelter, as it may lead to termination of state benefits.

Helping Families Navigate Complex Estate Planning Matters

Special needs trusts can be complicated, so it is important that you work with a seasoned attorney who can effectively guide you through the process. Our Dayton estate planning attorney has extensive experience helping families plan for the future.