Special Needs Trusts

Special Needs Trusts

Parents of children with special medical needs or disabilities often wonder what will happen to their kids when they are no longer around to care for them. It is important to provide for the needs of disabled adult children without jeopardizing their eligibility for Medicaid (MassHealth), Social Security (SSI or SSDI), or other government entitlements.

A special needs trust (also known as a supplemental needs trust) can provide peace of mind in many instances. Created as a stand-alone trust or in conjunction with a comprehensive estate plan, a special needs trust allows funds to be distributed to a trust beneficiary at the discretion of a trustee. Parents have the ability to designate themselves as trustees, and to provide for successor trustees should their child outlive them.

Many different types of assets may be held in trust, including assets derived from an inheritance or proceeds from a personal injury or medical malpractice verdict or insurance settlement. Without a special needs trust, a disabled person would be legally required to “spend down” all personal assets to qualify for government programs.

Special needs trusts must be crafted with precision in order to not run afoul of state and federal law. Certain special needs trusts, while they preserve an individual’s right to government benefits, may require payback provisions, while others may not. It is important to contact an attorney who is familiar with special needs planning to ensure that you are able to direct assets property to care for a disabled loved one.