Special needs trusts create a way to provide some funds for the benefit of a disabled person without causing them to lose their eligibility for government benefits like Supplemental Security Income (SSI), MassHealth, and other needs-based programs. If a person with a physical or mental disability receives funds or assets directly, the individual could get disqualified for public assistance for having assets that exceed the resource limitations for government programs.
A Massachusetts trusts attorney can answer your questions about special needs trusts, also called supplemental needs trusts. Here are some highlights about three of the benefits of special needs trusts:
The Disabled Person Can Inherit from Relatives through a Special Needs Trust
If a parent, grandparent, or someone else leaves money or other assets in a will or standard living trust to a person who receives government benefits and the inheritance takes the beneficiary’s countable resources over the resources limit, the recipient can lose eligibility for government programs. Many disabled people rely on government assistance programs for their medical care as well as help with food, housing, utilities, and other essential items.
People usually have to own meager assets to qualify for these benefits programs. For example, the SSI has an asset limit of $2,000 for an individual and $3,000 total for a couple. It does not take much of an inheritance to bump a person over these limits when the inherited assets get added to the person’s existing resources.
If you want a disabled loved one to be able to inherit and not lose essential services provided by public assistance programs, a special needs trust can accomplish that goal. Be aware, however, that these are sophisticated trusts, and if the trust agreement doesn’t comply with all the requirements, the government could kick the beneficiary out of the assistance programs.
The Beneficiary Can Obtain Goods and Services that Government Assistance Programs Don’t Provide
Government assistance programs tend to provide “bare-bones” benefits for people with disabilities. These programs don’t cover all types of therapy or medical care.
The trustee can use the assets of the special needs trust to pay for treatments and medical services that the public assistance programs don’t cover. Be sure to consult with your attorney for guidance on how to follow the strict rules before using trust funds to pay for items for the disabled person. Making an honest mistake could invalidate the protections of the special needs trust and render the person ineligible for assistance programs.
A Massachusetts Special Needs Trust Can Improve the Quality of Life of the Beneficiary
You cannot use assets of a special needs trust to pay for things that government programs cover, but you can, within limitations, purchase other items that can improve the quality of life of the trust beneficiary. The government programs cover basic needs. The trust can pay for other things, like going to the movies, travel, and other items to make the person’s life more comfortable and enjoyable.
Downsides of Special Needs Trusts
Some special needs trusts contain payback language that, upon the death of the beneficiary, require the trust to pay the state back for services the person received from government programs during the lifetime. Third-party trusts, however, don’t have the payback requirement.
As Massachusetts special needs trust attorney, Matthew Karr, Esq., can talk with you and evaluate the type of trust that would work best in your situation. Contact our office today online or call 617.299.6976 for a free initial consultation.