Are you considering providing financial support to a loved one with special needs? Its common for individuals to name their loved ones as beneficiaries in a will but this approach can unintentionally lead to financial turmoil. By doing so you could inadvertently disqualify them from crucial government programs causing them to lose vital financial and medical assistance. In this post well walk you through the ins and outs of special needs trusts answering the top five questions you may have. As you explore this option it is important to note that a skilled New York special needs trust attorney can provide invaluable guidance and expertise. At New York Legacy Lawyers our team of Brooklyn special needs trust lawyers may be able to help ensure your loved ones future is secure. Contact us today at (718) 713-8080 to schedule a consultation. What is a Special Needs Trust A Special Needs Trust (SNT) also referred to as a supplemental needs trust is a specialized legal arrangement designed to support an individual with a severe long-term disability. The trust serves as a reservoir of funds to cater for the unique ongoing needs of the beneficiary aiming to enhance their quality of life without compromising their eligibility for government assistance. The SNT is typically established within wills becoming effective upon the death of the donor. Its primary purpose is to provide financial support beyond what the government provides without causing the beneficiary to exceed the asset limit set by government assistance programs such as Medicaid. Therefore the funds in the SNT are used to supplement not supplant government benefits. The creation of an SNT in New York follows the same requirements as any valid trust. However it must also include specific provisions mandated by New York State law. If correctly drafted to align with these laws the trust assets wont be considered when the government determines eligibility for aid. An SNT can be initiated by anyone for the benefit of any disabled person regardless of their relationship. Commonly parents of disabled children establish these trusts but they could also be set up by grandparents other relatives or even a compassionate neighbor. To ensure the government doesnt count the trust income when determining benefit eligibility SNTs are irrevocably structured. In cases where a disabled person with assets decides to create an SNT for their benefit any remaining assets upon their death must be used to reimburse the government for any public benefits they received during their lifetime. This arrangement helps preserve the individuals assets while also ensuring they receive the necessary support from both the trust and government benefits. Things You Need to Know About Special Needs Trusts Heres how this type of trust can protect a beneficiary with disabilities. 1. What Are the Benefits? These types of trusts give you an extra layer of protection ensuring that the beneficiary can acquire and maintain the level of support they need. Unlike a will they give you the ability to dictate the way your money is spent. 2. How Can a Beneficiary Access their Trust? Giving a loved one with special needs money directly can complicate issues in a number of ways. However doing it through a trust doesnt mean that its difficult for them to access it. If they choose theyre able to use those funds for recreational use as well as to pay for personal care medical expenses accommodation education and transport. 3. What Should Be Included? Its important to go through your trust thoroughly to make sure it covers all the bases. In order to be legally watertight it has to include specific language. First of all it needs to state that its intended to provide supplemental and extra care rather than basic support. This clarifies that it funds extra services that the government wont provide to the trustee. The trust should also explain that its an exception to theOmnibus Budget and Reconciliation Act and include any provisions from the United States Code. Finally there should also be information regardingthe Medicaidpayback process. 4. How Do They Affect Government Assistance? Inheritance of anything over $2000 can cause a disabled person tolose government benefits. This means theyll no longer have access to subsidized housingSupplemental Security Income or Medicaid. A special needs trust allows you to leave them money without the risk of disrupting their current support. This is because they address the complicated needs of each individualseparating their funds from their income. 5. What Options Do I Have? There are two main options you can choose from. The first is a first-person trust which makes the beneficiary completely liable in the instance of another legal settlement such as inheritance or a compensation claim. The second is a third-party trust which gives parents or guardians more control over their funds. The money is used to secure the care and support their loved one needs and anything outside of that can be allocated as they wish. Topic Details Benefits of special needs trusts Provides an extra layer of protection for beneficiaries with disabilities by allowing the trustee to dictate the way the money is spent. Accessing the trust funds Beneficiaries can use the funds for recreational use personal care medical expenses accommodation education and transport. Necessary components of the trust The trust should state that it provides supplemental care rather than basic support be an exception to the Omnibus Budget and Reconciliation Act and include Medicaid payback information. Impact on government assistance Inheritance over $2000 can cause disabled individuals to lose government benefits but special needs trusts allow them to receive funds without losing support. How to Set Up Special Needs Trust To establish a special needs trust a trust document must be created that outlines how assets will be managed and distributed for the benefit of an individual with special needs. Although its possible to create a basic trust without legal assistance many families choose to consult with a special needs trust attorney who can help customize the trust to their specific needs. A special needs trust attorney can provide assistance and advice throughout the process to ensure that the trust document is tailored to meet the beneficiarys unique requirements. They can also help navigate any complicated legal or financial issues associated with the trust. In the trust document the individual creating the trust known as the grantor or settlor assigns assets to be managed by a trustee. Typically the grantor will name themselves as the trustee and appoint a trusted individual as the successor trustee. The grantor will remain in this role until they die become incapacitated or resign at which point the successor trustee takes over. Both the grantor and successor trustee are legally bound to follow the terms set out in the trust document ensuring that the assets are used for the benefit of the individual with special needs who is referred to as the beneficiary within the document. With the assistance of a special needs trust attorney families can establish a trust that effectively supports and protects the beneficiarys interests. Getting the Help of a Skilled New York Special Needs Trust Lawyer Dont leave your loved ones financial security to chance. Seek the help of a skilled New York special needs trust lawyer who can help you navigate this complex process and create a trust tailored to your familys unique needs. At New York Legacy Lawyers our team of experienced New York special needs trust attorneys may be able to help ensure that your loved one receives the support and care they deserve for years to come. Contact us today at (718) 713-8080 to schedule a consultation. New York special needs trust lawyer via New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/q-a-5-frequently-asked-questions-about-special-needs-trusts/