Boca Raton Special Needs Trust Attorney

Boca Raton Special Need Trust Attorney: Helping Families Provide for Loved Ones With Special Needs

If you have a loved one with special needs, such as a severe impediment or disability, there are several matters to consider when planning for their future. When considering a comprehensive estate plan, you have the option of establishing a Special Needs Trust (also often referred to as a “Supplemental Needs Trust”). An experienced Boca Raton special needs trust attorney at the Ellis Law Group can help you understand the complex aspects of these types of trusts and ensure your loved ones will be well taken care of. Contact us today to schedule a consultation and learn more about the benefits of a Special Needs Trust.

What Is a Special Needs Trust?

A Special Needs Trust is a written agreement under federal law that excludes specific assets and income from being used to disqualify a person from for receiving government benefits. For example, if a severely disabled person suddenly receives an inheritance, that person may lose their Medicaid health insurance. This would result in the entire inheritance paying for healthcare until he or she can again obtain Medicaid when the funds are gone. This type of outcome can be avoided by creating a Special Needs Trust.

A Special Needs Trust is designed so that a designated trustee may help enhance the life of the special needs individual and make their life more enjoyable by providing services the government benefits may not ordinarily provide for. These may include:

  • Sophisticated or more extensive medical equipment
  • More extensive medical or dental treatment
  • Private rehabilitation and education
  • Facilitation of communication and travel to maintain contact with family members

While the special needs beneficiary themselves may not demand funds, the terms of the trust are designed to enrich the beneficiary’s life to the greatest extent possible while not disqualifying them from receiving public benefits.

There are two main types of SNTs: first-party SNTs and third-party SNTs.

First-Party Special Needs Trusts

First-party SNTs can be established by the beneficiary or by the beneficiary’s parent, grandparent, legal guardian, or a court, and are funded with assets that belong to the beneficiary. These can be assets that are owned in the beneficiary’s own name or assets received through inheritance or court settlements. A first-party SNT is irrevocable, and the assets in it may be used only for the sole benefit of the beneficiary. Any amounts remaining at the beneficiary’s death must be paid back to the state, up to the total lifetime benefit the beneficiary received.

First-party SNTs generally are advantageous for special needs individuals who:

  • Owned assets prior to becoming disabled and need to qualify for government benefits
  • Receive or expect to receive an inheritance
  • Receive or expect to receive life insurance proceeds
  • Receive or expect to receive a settlement from a lawsuit or divorce.

Third-Party Special Needs Trusts

Third-party SNTs are established by a person other than the beneficiary, most often the beneficiary’s parents or guardians who wish to plan in advance for his or her lifetime needs. These SNTs can be either revocable or irrevocable and can be created through a will, a revocable living trust, or as stand-alone trusts independent of any other instrument. Third-party SNTs established as part of an estate plan (e.g., a will or revocable living trust) many not receive gifts until the death of the person who created it. An independent third-party SNT, however, can be funded at any time, and may even receive funds from multiple sources. The main advantage of third-party SNTs is that, unlike first-party SNTs, any amounts remaining in them upon the beneficiary’s death do not have to be paid back to the state as compensation for the beneficiary’s public benefits.

Third-party SNTs are thus helpful for individuals who:

  • Have special needs children or other dependents and want to provide for them
  • Want to fund the trust through multiple sources (for stand-alone third-party SNTs)
  • Want to retain control of the distribution of assets remaining after the death of the beneficiary

Our Boca Raton Special Needs Trust Explains Government Benefit Eligibility 

The primary purpose of most special needs trusts is to preserve the beneficiary’s financial eligibility for certain government benefits programs. As recipients of benefits under these programs are subject to strict income limits, they must be very careful to ensure that their income does not rise above the limit. The two primary income-based government benefits programs that can be preserved through a special needs trust are Medicaid and Supplemental Security Income (SSI). Medicaid is a state and federal program that provides medical coverage to low-income individuals (determined by household size). SSI is also a state and federal benefits program that provides cash benefits to cover the daily needs of low-income individuals (those owning less than $2,000 as an individual or $3,000 as a couple).

When to Establish a Special Needs Trust

Generally, a special needs trust can be established at any time, so long as the beneficiary is under the age of 65. Third-party special needs trusts, which are those funded for the benefit of the disabled individual using funds that do not belong to the beneficiary, are most commonly established during childhood by the disabled child’s parents. First-party special needs trusts, which are those funded using the beneficiary’s own assets, are commonly established later in life when the beneficiary becomes disabled.  If you’d like to discuss your specific situation, contact a Boca Raton special needs trust attorney.

How Can Special Needs Trust Funds Be Spent?

Even after a special needs trust is established, the trustee must still take care to make disbursements that will not jeopardize the beneficiary’s SSI and Medicaid benefits. When determining financial eligibility for SSI and Medicaid, not all of the recipient’s resources are considered “countable.” Resources that are not countable include:

  • The recipient’s home
  • One motor vehicle
  • Household goods and personal effects
  • Insurance polices
  • Property used for work

Countable resources include:

  • Cash
  • Investments
  • Checking and savings accounts
  • Investment accounts
  • Real property other than the recipient’s residence

Any disbursements the trustee makes to the beneficiary in countable categories may reduce the beneficiary’s SSI and Medicaid benefits. Trustees should thus keep disbursements limited to non-countable categories and other benefits and services that SSI and Medicaid do not provide, such as additional healthcare services, education, and travel. For more information about strategic disbursement of funds in a special needs trust, please contact a Boca Raton special needs trust attorney.

Contact a Boca Raton Special Needs Trust Attorney Today for a Confidential Consultation

If you have questions about establishing a Special Needs Trust, Ellis Law Group can provide you with quality and compassionate legal advice and representation. To learn more about these types of trusts, we encourage you to schedule a consultation with a member of our firm. Contact us online today or by phone at  561-910-7500 to speak with an experienced Boca Raton special needs trust attorney and discuss the terms of your trust as well as your rights and legal options.

Latest News

Using Asset Protection Planning to Protect Real Estate

Wed Sep 30, 2020

For many people, the real estate they own is among their most valuable assets, if not the most valuable assets. As unpleasant as it may be to consider, your real estate holdings may be at risk In the event of unexpected financial difficulties or legal action. An experienced Boca Raton […]

Full Read

How to Avoid Problems with Your Living Trust

Wed Sep 16, 2020

Estate planning is an investment in your future and your family’s security. Unfortunately, there are no easy solutions – careful planning and frequent reviews are the keys to a solid estate plan. A one-size-fits-all estate plan that you create and then forget about is bound to cause frustration at the […]

Full Read

Use It or Lose It? Gifting Considerations Before the November Election

Wed Sep 2, 2020

Estate Planning, Regardless of Net Worth Although the primary audience for this article is high net worth individuals (individuals whose assets are in excess of the estate/gift tax exemption amount) who may take advantage of sophisticated gifting strategies, estate planning is not just for the ultra-wealthy. Estate planning encompasses a wide […]

Full Read
More News