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Special Needs Trusts

What is a Special Needs Trust?

A Special Needs Trust is a Specially Designated Trust that helps to protect those loved ones in your life who have disabilities or a special diagnosis that allows them to receive State or Federal Benefits to assist with their living costs or arrangements. A Special Needs Trust allows them to have additional funds for such things as clothing, appliances, vacations, gifts, and other items without losing the benefits they are receiving or may be able to receive. 

How is it possible to receive additional funds or an inheritance and not lose your State or Federal Benefits?

Under the Federal OBRA '93 Statute the Federal Government established legislation that provides guidelines for setting up a Special Needs Trust. As long as the Trust meets this criteria and is approved by Social Security, the funds placed in the Trust are not considered income for that individual. The person receiving the funds will not lose their benefits. 

Who can be in charge of the Trust?

The Trust establishes a Trustee to be in charge of the funds. Depending on how the Trust is established, this Trustee may be an individual or a not-for-profit organization. Either way, the Trustee must be someone who is familiar or becomes familiar with their particular role as the Trustee of this type of Trust. 

How is the Trust funded?

A Special Needs Trust can be set up by a loved one for a beneficiary (eg. Child or Grandchild). Or it may be set up when a person who is currently receiving benefits becomes the recipient of a large sum of money, such as an inheritance or settlement.