What is a Special Needs Trust?
Special needs trusts can provide benefits to, and protect the assets of, the physically disabled or the mentally disabled. They specifically allow disabled persons to continue to receive income while not jeopardizing government benefits. Special Needs Trusts are frequently used to receive an inheritance or personal injury settlement proceeds on behalf of a disabled person or are founded from the proceeds of compensation for criminal injuries, litigation or insurance settlements.
What makes a Special Needs Trust different from other Trusts?
A Special Needs Trust should state that it is intended to provide “supplemental and extra care” over and above that which the government provides.
A properly drafted Special Needs Trust should reference the Social Security Operations Manual and the relevant portions from it that authorize the creation of the Trust. It also must contain the required language regarding payback to Medicaid. It is also irrevocable.
Who Needs a Special Needs Trust?
Any physically or mentally disabled person under the age of 65 to have funds or property held in Trust for his or her benefit, an unlimited amount of assets without jeopardizing any government received benefits.