Frequently asked questions for
Special Needs Trust:

What exactly is a Special Needs Trust?

Is a Special Needs Trust Necessary?

Are there limitations on how the money in a special needs trust can be spent?

What are some examples of “supplemental needs” that the special needs trust can pay for?

Do trustees of Special Needs Trust need any special help?

 

What exactly is a Special Needs Trust?
A Special Needs Trust is a special kind of trust for a person with disabilities designed to preserve public benefits eligibility. A Special Needs Trust can be used to provide for the needs of a person with disabilities that are not provided by benefits received from various governmental assistance programs. It can hold cash, personal property, and real estate or can be the beneficiary of life insurance policies. Top

Is a Special Needs Trust Necessary?
Typically, the receipt of a settlement, inheritance or gift causes the person with disabilities to be disqualified from their public benefits. These awarded monies would have to be spent to provide the same necessities that the public benefits were providing. After these funds are gone, the individual with disabilities would again qualify for public benefits. If these funds were placed in a Special Needs Trust, it could provide for the individual with disabilities for a longer period of time, while continuing to qualify for public benefits. Top

Are there limitations on how the money in a special needs trust can be spent?
Yes. A Special Needs Trust cannot be viewed as bank account with easy access to its funds. Its funds cannot be spent on food or shelter or other needs that public benefits are intended to provide. The Special Needs Trust can pay for supplemental needs that public benefits would not cover. Top

What are some examples of “supplemental needs” that the special needs trust can pay for?

• Clothing
• Educational equipment (computers, travel expenses)
• Recreational equipment (musical instruments, sports equipment)
• Prepaid funeral services
• Medical treatment and devices not covered by public benefit programs

REMEMBER: supplemental needs are those other than basic needs like food and shelter Top

Do trustees of Special Needs Trust need any special help?
Yes. The trustee(s) need to be well-educated on special needs trusts. The trustee(s) also should use the assistance of an attorney familiar with SSI, Medicaid, and other public benefits programs to prevent distributions from the Special Needs Fund that may disqualify the person with disabilities from such benefit programs. Top

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