Retain Government Benefits for Your Child
The last thing you would want is for your child to lose government benefits because of inheritance. A Supplemental Needs Trust, (also known as Special Needs Trust) enables you to leave an unlimited number of assets for your disabled or ill child. Assets contained in such a Trust are not considered countable assets for purposes of qualification for government benefits such as Medicaid, Supplemental Security Income (SSI), vocational rehabilitation, subsidized housing, and other benefits based upon financial need.
Supplemental Needs Trusts are completely legitimate. The Omnibus Budget Reconciliation Act passed by Congress in 1993 specifically authorized the use of Supplemental Needs Trusts for the benefit of individuals who are under the age of 65 years and disabled according to Social Security standards. The Social Security Operations Manual (POMS) authorizes Supplemental Needs Trusts for non-countable assets.
Special Needs Trust is Also a Valuable Estate Planning and Investment Tool
Many parents use the Supplemental Needs Trust as a tool to leave assets to their child after their death. The same trust can be used for your child’s own assets, such as an inheritance from someone else, proceeds of a lawsuit, insurance proceeds, even lottery winnings.
Special Needs Trust Provides Protection from Creditors
Because a Special Needs Trust is not revocable, assets in such trusts are not easily reachable by future creditors and are hard for the courts to reach if there is ever a judgment against the disabled beneficiary
Most Assets in a Supplemental Needs Trust are not Subject to Repayment
Assets contributed to a Supplemental Needs Trust by parents or third parties are not subject to repayment to the government. The same goes for proceeds of personal injury settlements that are court-ordered into the Trust. Only assets that at some point belonged to the disabled person can be taken back by Medicaid and even that occurs only after the death of the disabled individual.
Appointing a Co-Guardian
If you have a disabled or ill child over the age of 18, chances are you are already the child’s legal guardian. Appointing a co-guardian will make sure that the child will not be left without a guardian upon your death. Usually, the child’s sibling serves as the guardian after the parents’ death.
Call the Law Offices of Albert Goodwin at 718-509-9774 and make an appointment to discuss planning for your child’s special needs.