“Ask Your Attorney” Column

About Trusts For Disabled People

Dear Counselor: My adult son is disabled, and receives government monetary assistance. I’d like to provide for him in my Will. When I told my insurance man about my plans, he told me I needed to talk with a lawyer about a “special needs trust” because if I left money or property directly to my son, he may lose his eligibility for the government program. Is this true? What is a special needs trust?

Dear Client: If you leave money directly to your son, it would be counted as an asset that could disqualify him from governmental assistance benefits, or at least sharply reduce them. A “special needs” (or “supplemental needs”) trust allows a disabled beneficiary to receive gifts, settlements or funds, and yet not lose his or her eligibility for certain government programs. This is because the trust is not designed to provide basic support, but instead to pay for comforts or “extras” for your loved one, that could not be paid for by public assistance funds. These trusts can be used to pay for things like special education, recreation, transportation, needed appliances, equipment, and medical needs beyond those
necessities otherwise furnished through the government program. Such trusts are commonly created by parents or other family members for a child with special needs (even if the child is now an adult), and are also used in connection with a person who has become disabled as the result of an accident or illness. These trusts must be carefully drawn, and are technical in nature. Care must be taken to set the trust up to meet the dictates of law, and the needs of the disabled person. However, once they are set up, they can provide wonderful, long-term, assistance to your loved one.

John L. Maier, Jr.