what are supplemental needs trusts?
Supplemental Needs Trusts (also known as Third Party Special Needs Trusts) are irrevocable trusts that benefit a person with a disability. In a Supplemental Needs Trust, the grantor – usually the individual's parent, grandparents, or a family member – puts money in a special irrevocable trust where the person with special needs is the beneficiary.
Supplemental trusts are intended to fill the gaps that benefit programs cannot fill. This may include paying for such things as, for example:
Trips or vacations
Entertainment
Education and tutoring
Goods and services to improve the quality of life
Athletic competitions
A personal care attendant
Advanced or elective medical procedures
Notably, the funds from either trust cannot be distributed to the individual directly. Rather, they must be paid to the vendor or third party who is providing the goods or services.
An Important Estate Planning Tool for Families
A Supplemental Needs Trust gives someone the ability to leave a gift or inheritance to a person on Medical Assistance or SSI without making them ineligible for the program. The trust can be established as part of a revocable living trust, as a testamentary trust in a will, or an independent irrevocable trust.
Supplemental Needs Trusts are complicated to set up. There are numerous requirements and limitations that, if not adhered to, can make the trust ineffective. In other words, if done wrong, the person will become ineligible for the program they depend upon. Here at Signature Law, we ensure you have effective counsel drafting and setting up the trust — giving you peace of mind when it comes to providing for your heirs who need assistance.
“[H]e walked me through every step and explained everything in a way that I could understand....He is a good man who helped me set my affairs in order for my family. Because of that I sleep better at night and don’t worry about it during the day. I have recommended him to many people that I know. I would hire him again.”
Ready to Get Started?
Supplemental Needs Trusts can be a vital estate planning tool if one of your heirs will be someone with a disability that is receiving government benefits. In addition, Special Needs Trusts are an important tool for managing resources and finances. If you have questions about Supplemental Needs Trusts, we can help. Simply schedule a free consultation where we’ll answer any questions and learn more about your unique needs.
