Planning for the financial future of a family member or loved one with a disability is an important task that, when done correctly, can provide the support and maintenance needed to ensure that individual lives a full and happy life. One way to provide such support is through a Supplemental Needs Trust. There are many benefits to using a Supplemental Needs Trust to provide financial support to a disabled family member or friend.
Many individuals who live with a disability will at some point qualify for, and receive, public assistance. In order to qualify for public assistance, the individual must have assets below an amount established by the government. The benefits received through public assistance can be extremely helpful, but rarely are they enough for the individual to maintain an ideal quality of life. More often than not, family members assist in financially providing for the disabled individual. However, they must be careful in doing so as to not disqualify the individual for the public assistance they are receiving. Outright gifts or savings accounts will be counted as an asset, or income, to the disabled individual which can lead to their government benefits being cut off.
Supplemental Needs Trusts allow for additional financial support to disabled individuals without affecting their eligibility for public assistance benefits. The can be set up by anyone who wishes to provide support to someone with a disability – whether it be a family member or friend. These trusts exist to supplement the government benefits that are being received by the person with the disability.
Supplement Needs Trusts are irrevocable, which means that once they are established the Grantor (person creating the trust) cannot change the provisions, change the trust, or withdraw the trust assets. Once the Supplement Needs Trust is created, the “Trustee” (an agent named by the Grantor) takes legal ownership of any form of property placed in the trust, and manages them for the benefit of the “Beneficiary” (person with a disability). It is possible for the Grantor to also serve as Trustee. In function, a Supplement Needs Trust is an empty vessel in which the Grantor can place property to benefit their disabled family member. The Trust can hold a variety of assets including bank accounts, stocks, bonds, real estate, and certificates of deposit.
Supplemental Needs Trusts can be established for any person with a disability who is under the age of 65 or resides in long term care. They must be established by someone other than the beneficiary or the beneficiary’s spouse, and is funded by property from someone other than the beneficiary or the beneficiary’s spouse. As discussed, Supplement Needs Trusts are set up to pay for the needs of a family member or friend with a disability that are not provided for by government funded program. Further, the Supplement Needs Trust can be distributed to a person or non-profit at the time of death of the Beneficiary.
Of great importance is the fact that inheritances may be left to a Supplemental Needs Trusts. Parents of a child with a disability who may receive public assistance are often concerned about providing for that child when they are no longer here to do so themselves. By creating a Supplemental Needs Trust, they leave inheritances to financially support that child to the Supplemental Needs Trust without disrupting the public assistance that child may be receiving.
Schromen Law, LLC provides legal representation for planning, preparing and establishing Supplemental Needs Trust. Not only are these trusts complex to set up, but there are also a number of guidelines that must be followed when administering the Supplemental Needs Trust. Schromen Law, LLC not only works with families to set up the trust, but will continue to provide support and advocacy where the need arises throughout the administration of the trust itself.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Schromen Law, LLC and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.