• Home
  • Our Team
  • Practice Areas
    • Estate Planning
    • Elder Law
    • Traffic Matters
    • Criminal Defense
    • Real Estate
  • Testimonials
  • Contact
  • Blog
  • Senior Law Day
  • Reviews
  • Resources
Collins & Hepler, PLC
Contact us: (540) 962-6181
     275 W. Main St., Covington VA 24426
     202 S. Randolph St., Lexington VA 24450

Special Needs Trusts for the Disabled and Chronically Ill

1/3/2022

0 Comments

 
Picture
A Special Needs Trust (SNT) protects assets for someone who is chronically ill or physically or mentally disabled so that they can remain eligible for public benefits while being able to inherit or draw income from a separate fund.

Various benefits like Supplemental Security Income, Medicare, Medicaid, or other programs provide monetary assistance for qualifying individuals who make below a certain amount. SNTs are set up so that the individual has a resource that does not belong to them, but that they can still draw from. A trust of this kind does not count as part of the individual’s assets, therefore they can qualify for financial assistance while still retaining a source of income. Generally, the funds have to be used for certain purposes, such as medical expenses, payments for caretakers, transportation costs, and other things that public benefits do not cover.

Having a protected source of income in a Special Needs Trust is incredibly beneficial for someone with a disability or chronic illness, where medical and living expenses are high but disability benefits can only go so far. It is important that the SNT gets established before the beneficiary turns 65 years old.

There are different kinds of SNTs that accomplish the same goals—supplying the individual with income while they remain eligible for public assistance—but in different ways. Additionally, the party who creates the SNT will designate someone to control it. That person will oversee the management of the trust and disburse the funds to the beneficiary.

The disabled or chronically ill person can put their own money into a first party SNT that they can draw from later. However, first party SNTs may be subject to Medicaid repayment rules, meaning that the money is still considered the individual’s and will be used to evaluate whether they qualify for financial assistance programs.

There are also third party SNTs, which are also called Supplemental Needs Trusts, which have funds that get put into the trust by someone else, such as the parents of the individual, which the disabled or chronically ill person draws from later. These funds are not subject to Medicaid repayment rules and do not effect the beneficiary’s eligibility for public benefits.

An SNT can be created as part of someone’s will or as a standalone. If the SNT is created under a Last Will and Testament or a Living Will, then the beneficiary cannot withdraw funds until the testator dies. If an SNT is created on its own and not part of someone else’s will, the beneficiary does not need to wait to withdraw funds. They are also designated as revocable or irrevocable, meaning that if the beneficiary has the power to revoke the trust, the assets will be considered available for Social Security and Medicaid purposes (remember, these programs consider the individual’s finances when deciding how many benefits they can award). If the SNT is irrevocable, the beneficiary cannot dissolve the trust and the assets cannot be seized by certain programs.

When setting up a Special Needs Trust or any kind of fund for yourself or a loved one, you should consult an attorney to draw up a valid legal document that will ensure that the trust has a clear directive and purpose. Seek out an attorney who has experience in trusts, estate planning, elder or disability law.
0 Comments



Leave a Reply.

    Collins & Hepler, PLC

    A small firm with big abilities

    Archives

    August 2023
    June 2023
    May 2023
    April 2023
    February 2023
    January 2023
    November 2022
    October 2022
    September 2022
    August 2022
    May 2022
    April 2022
    March 2022
    January 2022
    December 2021
    November 2021
    October 2021
    August 2021
    March 2017
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015

    Categories

    All
    Conservation Easements
    Criminal Law
    Divorce And Family Law
    Elder Law
    Estate Planning
    Events
    Farm & Land Protection
    Juneteenth
    Legal News
    Real Estate
    Traffic Matters

    RSS Feed

Home

Our Team

Practice Areas

Testimonials

Blog

Contact

Serving clients in Covington, Clifton Forge, Warm Springs, Bath County, Lexington, Buena Vista,  Alleghany County, Bath County,  Rockbridge County Virginia and surrounding areas.
​
Because the results obtained in specific cases depend on a variety of factors unique to each case, past case results do not guarantee or predict a similar result in future cases undertaken by a lawyer or law firm.
Copyright © 2016