What Is a Special Needs Trust?

A special needs trust (SNT) helps people with physical or mental disabilities maintain their eligibility for government benefits like Medicaid and Supplemental Security Income (SSI). The beneficiary of an SNT does not own the trust assets, so they are not counted as income or assets to determine Medicaid or SSI eligibility. Instead, the trustee of the SNT can use the trust assets to pay for things that supplement the beneficiary's government benefits. This trust can include things like housing, transportation, and medical care.

When Do the Benefits of a Special Needs Trust End?

The benefits of a special needs trust (SNT) end when the beneficiary no longer meets the definition of a disabled person under the Social Security Administration's standards or when the beneficiary dies. At that point, the trustee must distribute any remaining trust assets to the named remainder beneficiaries. However, suppose the SNT was established with Medicaid payback provisions. Then, the state may be entitled to recover some, or all Medicaid benefits it paid on behalf of the beneficiary.

What Kind of Assistance Does a Special Needs Trust Benefit Provide?

A special needs trust is a type of trust that can be used to provide financial assistance for someone with special needs. The trust money can be used to pay for medical expenses, housing, and other needs not covered by public assistance programs. The trust can also help the person maintain their eligibility for public assistance programs.

Are a Special Needs Trust a Revocable Trust?

A Special Needs Trust (SNT) is a type of trust used to provide for the care of a special-needs beneficiary. The trustee of an SNT has the discretion to use the trust assets to pay for the beneficiary's food, shelter, education, and medical expenses. An SNT can be either revocable or irrevocable.

If an SNT is revocable, the settlor (the person who created the trust) can change their mind about who the beneficiary should be or how the trust assets should be used. If an SNT is irrevocable, the settlor cannot make any changes to the trust once it has been created.

The main difference between a revocable and irrevocable trust is that a revocable trust can be changed or canceled by the settlor at any time. In contrast, an irrevocable trust cannot be changed or canceled once created.

Special needs trusts are often created as irrevocable trusts so that the assets in the trust are protected from creditors and cannot be accessed by Medicaid.

When Are First- and Third-Party Special Needs Trusts Used?

A first-party special needs trust (SNT) is used when the beneficiary has assets they want to use to fund the trust, such as an inheritance or personal injury settlement. The trustee of a first-party SNT has control over the trust assets and can use them to pay for the beneficiary's disability-related expenses.

A third-party special needs trust (SNT) is used when someone other than the beneficiary, such as a parent or grandparent, wants to set aside funds for the beneficiary's future care. The trustee of a third-party SNT has control over the trust assets and can use them to pay for the beneficiary's disability-related expenses.

Third-Party Special Needs Trust

A third-party special needs trust is a type of trust that can be used to provide for the care of a beneficiary with special needs. The trustee manages the trust assets and ensures that the beneficiary's needs are met. The trust agreement sets forth the terms of the trust and how it will be handled: the Medicaid program and those not fund two types of special third-party needs trusts.

A third-party special needs trust can be a helpful tool for providing the care of a special-needs beneficiary. However, it is essential to consult with an attorney to determine whether a third-party special needs trust is right for your situation.

What is a Pooled Special Needs Trust?

A Pooled Special Needs Trust (SNT) is a trust established and managed by a non-profit organization. The organization pools the assets of many special-needs beneficiaries into a single account. Each beneficiary has a separate account within the pool, but all the assets are managed together. The trustee of the pooled trust manages the assets in the best interests of all the beneficiaries. The trustee is also responsible for ensuring that the terms of the trust agreement use the assets.

The benefits of a Pooled SNT include:

-The ability to pool resources from many beneficiaries, which can make it easier to get professional management of the trust assets.

-The trustee can invest the assets in a way that benefits all the beneficiaries.

-The trust can be used to hold and manage assets from multiple sources.

-The trustee can act on behalf of all the beneficiaries, which can save time and money.

-The trustee can provide expert advice on how to use the trust assets to meet the needs of the beneficiaries.

-The trustee can help ensure that government benefits are not jeopardized; and

-There is no need for payback to

Pooled Trusts

A Pooled Trust is a trust that a non-profit organization manages. The organization pools the assets of many special-needs beneficiaries into one trust. Each beneficiary has a separate account within the trust. The trustee manages the trust and ensures that the beneficiary's needs are met. In addition, the trustee ensures that the money in the trust is used for the beneficiary's benefit and not anyone else.

The following terms are commonly found in first-party and third-party special needs trust agreements:

A "special needs trust" or "SNT" is a trust created for the benefit of a disabled person. The trustee of the trust holds and invests the trust assets for the use of the disabled beneficiary. The terms of the trust agreement may provide for payments to be made to cover the beneficiary's medical and other expenses.

A "third-party special needs trust" is a trust created by someone other than the disabled beneficiary, such as a parent or grandparent. The trustee of a third-party SNT has the discretion to use the trust assets for the benefit of the disabled beneficiary, up to the amount allowed by law.

A "revocable trust" is a trust that can be amended or terminated by the grantor at any time. A revocable trust becomes irrevocable upon the death of the grantor.

The text above is for general informational purposes only and should not be considered legal advice. For more information, click Contact Us. Follow Mark Fishbein on YouTube.