Mark Glendon

Who Qualifies for a Special Needs Trust?

A special needs trust (SNT) is a unique trust that preserves a person's ability to receive government benefits like Medicaid or Supplemental Security Income. Some jurisdictions call it a supplemental needs trust. The purpose of these trusts is to meet the needs of someone with disabilities without sacrificing their eligibility for the public benefits programs they're entitled to. Secure their future with a Supplemental Needs Trust - visit us now for expert guidance and peace of mind!

Because the beneficiary doesn't own the assets in the trust, they still qualify for the programs they need.

The trust can supplement a beneficiary's needs, paying for additional expenses not covered by government programs. There are two types of SNTs, and each one has different qualifications.

First-Party Special Needs Trust

This trust receives funding from the person with disabilities. It's self-settled. The person with disabilities moves their assets into the trust, giving up ownership to qualify for the programs they need.

The beneficiary must create and fund a first-party SNT before they are 65 years old. It must also be irrevocable. Creating the trust must also involve an agreement to reimburse Medicaid upon the beneficiary's death or the trust's termination. This agreement comes in the form of state and federal provisions.

Another requirement is that administration can only occur for the beneficiary's sole benefit.

It is possible to have a pooled first-party supplemental needs trust. In that case, you can establish a pooled trust for disabled individuals of any age. However, a non-profit association must administer and manage it. All pooled trust beneficiaries will have a separate account, but they contain combined funds for investment.

Third-Party Special Needs Trusts

This type of SNT receives funding from someone other than the beneficiary. For example, family members may create this trust. The law states that assets owned by the beneficiary can't be a part of the trust.

It comes with zero provisions to reimburse Medicaid upon termination or death. However, the individual who creates the trust can decide how the estate gets distributed whenever the beneficiary passes.

Special Needs Trusts are an important financial instrument that can help people with disabilities. It protects assets while allowing beneficiaries the care and benefits they need.

Author Resource:-

Mark writes often about estate planning. His articles may include topics like real estate closing attorney and business succession laws to help the people in needs. You can find his thoughts at real estate law blog.