Does Your Loved One Need a Special Needs Trust?

When you’re the caregiver of a loved one with special needs, you make important decisions every day. Sometimes those decisions are life-changing – for you and your loved one. Often, caregivers enlist the help of experts: therapists, medical specialists, and other advisers. It’s also important to consult with an attorney. An attorney who understands the needs of disabled individuals may suggest creating a special needs trust to provide necessary long-term care.

How is a Special Needs Trust Different from Other Trusts?

A trust generally involves three parties:

• the trustor who signs a trust document to create the trust;
• the trustee who manages the trust assets and distributions to beneficiaries; and
• the beneficiary who receives distributions from the trust.

In a typical revocable trust, one person may serve all three roles initially. Special needs trusts are different, though, because the beneficiary is someone with one or more conditions that require high levels of care. Often, the beneficiary may structure their income to avoid jeopardizing eligibility for public benefits.

Who Benefits from a Special Needs Trust?

If you or a family member meet some of the following criteria, a special needs trust might provide significant assistance:

• Under age 65.
• May need government benefits like Medicaid or SSI in the future.
• Suffers from a condition that limits independence or requires substantial or long-term treatment.
• Will need assistance after you are no longer able to help.

What Will a Special Needs Trust Cover?

The trustee of a special needs trust is restricted to spending trust funds for the benefit of the beneficiary. To make sure expenditures are appropriate, the trustee should know what state and federal law allow. The trust document itself may provide some guidance, as well as the attorney representing the trust or the beneficiary. In general, though, Florida law allows the following types of expenses:

• Food;
• Housing-related expenses like mortgage, real property taxes, and rent; and
• Utilities like gas, electricity, water, sewer, garbage removal.

This list is not comprehensive and subject to changes in rules and regulations.

What Do I Need to Know About Special Needs Trusts?

If you have a loved one who needs special care, keep the following things in mind:

• A special needs trust can provide additional financial security to your loved one;
• The person drafting the trust must understand the needs of the disabled person;
• If drafted improperly, a special needs trust can negatively affect eligibility for programs like Supplemental Social Security Income (SSI) or Medicaid.
• It’s best to have an attorney create your trust documents.

Learn More About Special Needs Planning.

Consult with an experienced Florida estate planning attorney. We look forward to discussing your needs and the needs of your loved ones. Attorney John Mangan is board certified in Wills, Trusts & Estates by the Florida Bar. Please call us at 772-324-9050 or use our Contact Form to set up an appointment. We help clients throughout Florida, including Stuart, Palm City, Hobe Sound, Jupiter, and Port St. Lucie.