Special Needs Trust in Emergencies
A Special Needs Trust (SNT) is designed to protect people with physical and/or mental disabilities from financial abuse, in the event that they’re unable to manage their own care or finances. It also ensures they’re able to utilize public benefit programs by safeguarding their assets. Here are some ways Special Needs Trusts can help families with estate planning, especially during an emergency like COVID-19.
Preserving Public Benefits
Often, people with disabilities qualify for government programs, such as Medicaid/Medi-Cal, or Supplemental Security Income, and even subsidized housing. However, there are certain financial parameters that must be met. This isn’t an issue, though, when assets are held in a Special Needs Trust. It allows parents to supplement their child’s lifestyle, while preserving their access to government programs. The assets are viewed as belonging to the trust itself, rather than the beneficiary.
Another benefit to a Special Needs Trust is that it allows other people to contribute without triggering the gift tax, or generation-skipping tax so long as the donation remains under a certain dollar amount.
A Special Need Trust provides oversight that ensures assets are used as you intended, as well as in accordance to SSA and IRS guidelines. There’s no wiggle room for family conflict or misappropriation of funds. Additionally, the trust can act as a checking account for the child’s expenses. For example, personal care attendants, education, or out-of-pocket medical expenses. Should there be a future trustee, they can then refer back to these records.
In a very real way, this global health crisis has shown us that we can never know what tomorrow will bring. But proper estate planning can help offer peace of mind to you and your family. A Special Needs Trust ensures both private and public benefits, safeguarding your loved one’s quality of life. For more information on how a Special Needs Trust can benefit your unique situation, please contact our office at 510-749-8358.