Any parent, guardian or caregiver of a person with special needs has at one time or another wondered, “What will happen when I’m gone?” Whether your loved one is a child with autism or an adult with a traumatic brain injury, the uncertainty of what happens to them in your absence can be daunting. It’s a difficult reality to face and, unfortunately, the financial aspects may be even more complicated than you think.
Supplemental Security Income (SSI) and Medicaid are government programs that provide need-based benefits to people who are blind, over 65 or disabled who have few resources of their own. SSI helps qualified people with special needs receive money for necessities such as food, clothing and shelter. Oftentimes, however, this isn’t quite enough to provide for more than the bare minimum. If you are hoping to give your loved one a higher quality of life, from being able to take a vacation or to pursue a hobby, setting aside extra money for them after you pass might seem like a good idea. But complications may arise as the financial gift you leave could disqualify them from receiving their public benefits.
At first glance, it appears to be a catch-22. Fortunately, the government has established ways for loved ones to provide extra financial support while also allowing the individual to continue to receive public benefits. This is through a special needs trust or supplemental needs trust. Though certain requirements must be met, it’s a way to make sure your loved one can live a full life without sacrificing their public assistance.
There are certain intricacies regarding these trusts. For example, the funds cannot be disbursed directly to your loved one; a third party will receive the funds and will then administer the funds according to your wishes. There are also different types of trusts, such as third-party trusts and self-settled trusts. Additionally, special needs trusts aren’t intended to cover the same things that SSI covers; they are for supplemental and additional expenditures.
Because of the complex nature as well as the importance of special needs trusts, it’s best to talk to an attorney with extensive experience in special needs planning. In doing so, you can be confident that your loved one will be taken care of in the way you desire.