Special Needs Trusts (or "SNT")

Families with disabled relatives need to be especially cautious when planning their estates. Many disabled adults receive public benefits, such as Supplemental Security Income (or "SSI") and Medicaid, which are means tested programs. If the disabled adult were to acquire any sum of money, either by gift or inheritance, his or her benefits could be put in jeopardy. There are tools under state and federal law that allow parents, grandparents and other relatives to provide for a disabled person without compromising the disabled person's monthly SSI payments, Medicaid coverage and other benefits provided by the government.

A Special Needs Trust (or "SNT"), sometimes referred to as a Supplemental Needs Trust, is a discretionary trust that allows a disabled person to be the beneficiary of a trust without disqualifying him or her from public welfare benefits. If you have a disabled child, it is very important that you have a will that provides for a SNT. If the disabled person inherits from your estate without a SNT, his or her government benefits will be terminated until the inheritance is "spent down."

The funds in a SNT are used to improve the quality of life for the disabled person, not to provide for his or her basic needs. Supplemental Security Income is intended to provide for food, shelter, clothing and other necessities of life. The SNT is supposed to be spent on the beneficiary to make his or her life more comfortable. Appropriate expenditures from a SNT might be to take them on a vacation or to purchase things that are not necessary but they will enjoy such as cable television, tickets to a ball game or a pet.

SNTs can be funded in several ways. Parents will often create a SNT for a disabled child and purchase life insurance policies that are payable to the SNT for the benefit of the child. Often, relatives of a disabled person will create testamentary SNT (meaning it is created in a Will) to provide for the disabled person after the testator's death. If the child receives an award from a personal injury lawsuit or settlement, a SNT can be established for the injured child while still allowing him or her to collect SSI. SNTs can also be a very useful tool in Medical Assistance planning.

There are several types of SNTs. An attorney can help you determine the best way to provide for your loved one during your lifetime and after your death. Our caring attorneys can also advise you on other issues relating to your disabled child, such as guardianship issues, who will care for your child and the best ways to ensure your child has the smoothest transition possible if you are unable to care for him or her anymore