Special Needs Financial Planning Advise – Does it make sense to maintain a Special Needs Trust [Video]

Does it make sense to maintain a Special Needs Trust if an individual is no longer seeking or eligible for means tested benefits? We believe so, find out why…

Most families understand that having a special needs trust is the cornerstone of their planning for their loved one with a disability. In many cases, the special needs trust is established for the primary purpose of keeping the individual eligible for means tested benefits. Those benefits include supplemental security income known as SSI and Medicaid which includes both health care and Medicaid waiver services. The question that arises from time to time is whether or not it’s essential to maintain a special needs trust if the individual is no longer seeking or eligible for these means tested benefits.
While every circumstance is unique and deserves careful analysis, in most cases it does make sense to maintain a special needs trust for the benefit of the individual even if there are no means tested benefits being received. There are several reasons for this.
First, one of the primary purposes of having a special needs trust is to protect the assets that are being set aside for the future benefit of the individual, who is the beneficiary. A trust provides a protective shell around those assets and can ensure that the individual is never taken advantage of by someone seeking to take their money. Second, the trust allows for a professional fiduciary to evaluate spending and ensure that the assets are invested appropriately for the individual’s future benefit. In many cases the individual is not capable of making the best financial decisions. The trustee has a legal responsibility to invest the assets prudently for the benefit of the individual. Third, If the individual is not receiving means tested benefits and has demonstrated decent financial decision-making skills, the trustee should have the flexibility to make distributions from a special needs trust with fewer restrictions than if the individual was receiving means tested benefits.
In summary, if the special needs trust is drafted by an attorney experienced with special needs planning, it can play a valuable role in the individual’s planning regardless of how much success and independence they achieve in the future.
If you have other questions about special needs trusts, or need to a referral to an attorney to draft one for your family or review your existing documents, please contact us. SMILE