Thinking Outside The Special Needs Trust

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Creating special needs trust is a powerful tool. Many children with special needs are eligible for supplemental security income (SSI), Medicaid, and even subsidized housing. All of these programs are excellent resources for your special needs child to utilize. 

A special needs trust allows you to hand down your assets without making someone ineligible for the benefits that they rely on. However, there are people with special needs who may not qualify for SSI or Medicaid. But due to their disabilities, they are not fully capable of taking care of themselves. 

For these kinds of people, you and your attorney may choose a different estate planning strategy.

Discretionary Support Trust  

A discretionary support trust, for instance, still allows for a trustee to disperse supplemental income to your chosen beneficiaries. But this type of trust gives the trustee an additional level of flexibility in disseminating funds to your child. 

It is important to note that a beneficiary’s access to money is either mandatory or discretionary for trusts. When a trust is mandatory, the beneficiary can request money from the trustee, and the trustee is required to issue those funds. With a discretionary trust, the trustee has the choice of whether to give the funds. 

That is particularly important when it comes to some people who possess special needs. The trustee can continue to look out for their best interests. Choosing the right trustee to assist with your special needs child is of vital importance. 

Benefits

Recall how a special needs trust could be used in conjunction with someone receiving benefits such as SSI or Medicaid. The trustee needs to be diligent because there are such things as countable resources. People who receive SSI must have $2000 or less of countable resources. 

If the beneficiary (special needs child) has more than $2000 in their bank account (or in cash) or spends more than that on meals or property taxes, for example, they could no longer be eligible for SSI. 

If the special needs child is not receiving SSI, the trustee is not beholden to that $2000 limit. This frees up the trustee to pay for rent, mortgage, and even make investments that exceed $2000.

When you build your estate plan and utilize a discretionary trust, you can still identify which things the trustee has to pay for. For example, you could set a minimum allowance that your beneficiary can receive to support their living expenses. 

Matus Law Group

The Matus Law Group was built around compassion and understanding for special needs families. We know how much you want your child to have a fulfilling life, and we can help you create an estate plan with that in mind. If you have any further questions or would like to speak to a professional estate planning attorney, contact The Matus Law Group.

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Christine Matus

Christine Matus