Special Needs Trust

Minneapolis Special Needs Trust Attorneys

Supplemental Needs Planning for Clients in Minneapolis, St. Paul, and Throughout Minnesota

Do you currently provide care for a child or loved one with special needs (such as mental or physical disabilities)? If so, you have likely contemplated what may happen to your loved one when you are no longer able to serve as their caretaker.

While you can certainly plan for them to receive money and assets upon your passing, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medical Assistance (Medicaid) programs. If you do not leave them any assets, the benefits provided by these and other programs are generally limited to the bare necessities such as food, housing, and clothing. As you can imagine, these limited benefits will not provide the resources that would allow your loved one to enjoy a richer quality of life. Fortunately, the government has established rules allowing assets of the individual with special needs to be held in trust (called a “special needs” or “supplemental needs” trust) without resulting in disqualification for SSI and Medical Assistance as long as certain requirements are met.

Our Minneapolis special needs trust lawyers at Guttman Law have substantial experience setting up these types of trusts. We can help ensure that government benefit eligibility is preserved while at the same time providing assets that will meet the supplemental needs of the person with a disability (those that go beyond food, shelter, and clothing, and the medical and long-term support and services of Medical Assistance). The special needs trust can fund those additional needs and must be designed specifically to supplement (not replace) public benefits. Parents should be aware that funds from the trust cannot be distributed directly to the disabled beneficiary. Instead, it must be disbursed to third parties who provide goods and services for use and enjoyment by the disabled beneficiary.

The special needs trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s eligibility, such as:

  • Annual check-ups at an independent medical facility
  • Attendance of religious services
  • Supplemental education and tutoring
  • Out-of-pocket medical and dental expenses
  • Transportation (including the purchase of a vehicle)
  • Maintenance of vehicles
  • Purchase materials for a hobby or recreation activity
  • Funds for trips or vacations
  • Funds for entertainment such as movies, shows, or ballgames
  • Purchase of goods and services that add pleasure and quality to life — this may include computers, videos, furniture, or electronics
  • Athletic training or competitions
  • Special dietary needs
  • Personal care attendant or escort

Special needs trusts are a critical component of your estate planning if you have disabled beneficiaries you wish to provide for after your passing. Generally, special needs trusts are either standalone trusts funded with a separate asset (like a life insurance policy) or structured as a sub-trust in your existing living trust.

Special Needs Trust FAQs

Q: What Is the Purpose of a Special Needs Trust?

While you can certainly bequest money and assets to those with special needs, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs. However, public monetary benefits only provide for the bare necessities, such as food, housing, and clothing. As you can imagine, these limited benefits will not provide your loved ones with the resources that would allow them to enjoy a richer quality of life. Fortunately, the government has established rules allowing assets to be held in trust (called a special needs or supplemental needs trust) for the benefit of a recipient of SSI and Medicaid, as long as certain requirements are met.

Q: When Should a Special Needs Trust Be Established?

Generally, a special needs trust should be established no later than the beneficiary’s 65th birthday. If you have a disabled or chronically ill beneficiary, you may want to consider establishing the special needs trust at an early age. One benefit of having the trust in place is that if the disabled beneficiary becomes the recipient of funds such as gifts, bequests, or a settlement from a lawsuit, they can immediately be transferred to the special needs trust without affecting that individual’s eligibility for government benefits.

Q: Who Can Establish a Special Needs Trust?

While special needs trusts are typically established by parents for their disabled children, any third party can establish a special needs trust for the benefit of a disabled beneficiary. It is important to seek the assistance of competent counsel when creating a special needs trust, because a poorly drafted trust can easily be subject to “invasion” by the government agencies that provide benefits. Our law firm has the experience and the expertise to establish effective special needs trusts for anyone who wishes to provide for a disabled beneficiary.

Q: Our Family Is Wealthy. Do We Still Need to Create a Special Needs Trust?

Yes, you should still establish a special needs trust to protect your disabled beneficiaries from potential creditors. For example, if your disabled beneficiaries are ever sued in a personal injury action, the assets in the trust would not be available to the plaintiffs. Furthermore, because the funds in the special needs trust are not countable as available assets for purposes of determining government benefit eligibility, more of your money can be used for those supplemental expenditures that will allow your disabled beneficiary to enjoy a higher quality of life. Otherwise, much of your assets will be used to pay for private care benefits that are extremely expensive and can drain even significant sums of money over time.

Contact our firm today to learn more about special needs trusts and how we can serve you.

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