Top 5 Frequently Asked Questions about Special Needs Trust
1. What is a Special Needs Trust?
A Special Needs Trust (also called a Supplemental Needs Trust) is a way to provide financial security for your child with special needs and help ensure a better quality of life. A Special Needs Trust enables a person with a physical or mental disability to have an unlimited amount of assets, as long as they are held in Trust for his or her benefit. The assets in a Special Needs Trust are not counted when qualifying for certain government benefits.
2. Who can create a Special Needs Trust?
A Special Needs Trust can be set up by a parent, grandparent or legal guardian. Sibling and other relatives or friends can also create an SNT under certain circumstances. A judge can also order a Special Needs Trust be created for a disabled individual.
3. Why does my child need a Special Needs Trust?
Your child may qualify for government benefits for people with special needs, including Medicaid and SSI. These programs may not always provide the level of benefit or quality of care that you would want your child to have, but if you provide the funds to supplement your child’s care, that additional income could disqualify him or her from receiving benefits from the government. A Special Needs Trust provides a safety net to pay for expenses not covered by government programs without the risk of losing those benefits.
4. How will my child use the Special Needs Trust?
The money in the Special Needs Trust may be distributed for many different things your child wants or needs. Furniture, cars, clothes, and other personal needs can be paid for with money from the Trust. The Trust can also pay for medical expenses including insurance premiums, alternate therapies and any special equipment. Even social and recreational expenses like TVs, computers, movies, sports, vacations or camps can be funded by the Trust. Intellectual or artistic activities like classes, books, games and crafts are also provided for through a Trust. Your child can have a more productive and fulfilling life through access to funds through a Special Needs Trust.
5. Who will be the Trustee for my child’s Special Needs Trust?
The Trustee is the person who will manage the Trust and make the decisions about how to invest or spend the money in it, so it’s important to choose someone you trust. You or your spouse can be the Trustee, or you can designate a professional corporate trustee.