Annapolis Special Needs Trust Attorney
If you have a special needs family member, you know that they need extra support to thrive in life. What happens to them if you become ill or pass away? Taking the time to plan your estate now can provide security for those in your family with special needs. While there are many ways to plan an estate, and a variety of trusts available, the special needs trust serves a specific purpose to plan for the future of those who live with lifelong disabilities. An Annapolis special needs trust attorney can assist you with your questions and help you create the appropriate trust to meet your family’s situation.
What is the Purpose a Special Needs Trust?
A special needs trust is created by an individual for a beneficiary who has an incapacitating disability. The costs of a living with a disability vary vastly depending on what additional care is needed. According to Care.com, the average cost of an adult day program is $15,250 per year while the average cost of a nursing home without Medicaid support was $77,745 without the financial support of Medicaid. The purpose of this type of trust is to allow a person with special needs to remain on public benefits, such as supplemental security income or Medicaid, while still providing financial assistance to them after the individual who created the trust dies.
Two Types of Special Needs Trusts
- Self-Settled Special Needs Trust – These trusts are often formed after a personal injury lawsuit when the beneficiary has received compensation for damages. Sometimes, the incident that led to the personal injury lawsuit is what caused the disability to begin with, but that isn’t a stipulation for this type of trust. For a self-settled special needs trust to be exempt as an asset when looking at eligibility for Medicaid or other social services, it must allow the government to take over what is left in the trust after the beneficiary dies.
- Third Party Special Needs Trust – These trusts allow a parent, grandparent, or other family member to leave assets to a person with an incapacitating disability without affecting their eligibility for care. If the special needs beneficiary dies, the remaining trust can still be distributed to other family members.
There are specific items that a special needs trust can and cannot pay for. For instance, according to the Disability Resource Community, special needs trust can often be used to pay for vacation, but because the trust cannot be used to pay for food and shelter, the planning must be very deliberate and transparent to avoid penalties.
Contact a Special Needs Trust Attorney Today
Special needs trusts are complex and the last thing you want to do is make your loved one ineligible for the government benefits that will help with their care. If you are considering how to offer financial assistance to a person with severe disabilities, it is critical that you speak with a knowledgeable special needs trust attorney. The Annapolis attorneys at Frame & Frame can help. Contact us at 410-255-0373 to schedule a free consultation.