Special Needs Trust Attorneys in Roswell Helping Families Protect the Interests of a Disabled Loved One

When you have a family member that requires special care due to mental or physical disabilities, it is important to take the right steps to ensure he or she will be able to live comfortably and get the care he or she needs, regardless of what the future may bring. An essential tool to help you achieve this goal is an SNT or special needs trust. Our firm explains the key aspects of an SNT and what you need to know before creating one.

How Can a Special Needs Trust Help My Disabled Relative?

A special needs trust allows a physically or mentally disabled person to use property, such as funds and real estate, without counting those assets against the Medicaid or SSI eligibility threshold. While SSI checks cover basic needs, such as food and housing, the assets in a special needs trust can help pay for other bills and necessities not considered under basic needs but that still play an important role in sustaining your loved one’s quality of life, like paying for college or even a vacation.

Because an SNT is a legal entity on its own, it can pay bills and make transactions directly. So, if a beneficiary wishes to buy a new vehicle, pay the cable bill, or pay for medical care expenses not covered by Medicaid, that person can write checks directly from the trust. This is important because any cash payments withdrawn from the trust into the beneficiary’s hands will count as taxable income. Assets in the trust can still be used by your disabled loved one without affecting his or her eligibility for benefits.

How Do I Know Which Type of Special Needs Trust is Best for Me?

There are two main types of SNTs, a first-party special needs trust and a third-party special needs trust. What determines the type of trust you can set up is where the assets funding the trust are originating from. Both are considered irrevocable trusts and have the same benefits regarding Medicaid eligibility, with a few exceptions.
A first-party SNT is funded with assets owned by the disabled person, who will become the beneficiary of the trust. This is common in cases where the person received a personal injury settlement amount or received an inheritance payment. It also applies to someone who did not have a disability in the past and owned assets, then became disabled due to illness or an accident. A key factor of a first-party SNT is that it contains a Medicaid payback provision, which requires the trust to pay back the government for the cost of care received by the disabled person before distributing the remainder of assets to any heirs.

A third-party SNT, on the other hand, is usually created by the family of the disabled person and funded with assets and money that never belonged to that person. Because the assets were owned by a third-party (parents, siblings, etc.), they don’t count against the disabled person’s income and don’t usually require any money to be paid back to the government. There are many details and complexities involved in setting up an SNT, so it is best to consult an Estate Planning Attorney in Atlanta to find out which type of SNT may be more beneficial for you and your loved one’s needs.

Can a Special Needs Trust Pay for a Family Caregiver?

The funds in an SNT are for the sole benefit of the beneficiary. Recent updates in SSA rules allow special needs trust funds to be used for compensating caregivers—a family member, a person outside the family, or a hired individual from a professional agency—allowing beneficiaries to pay caregivers at a reasonable rate comparable to compensation received for similar services in their area.

It also allows for the purchase and payment for goods and services, as long as they are meant primarily for the beneficiary. Funds in an SNT can also be used for travel expenses resulting from the beneficiary’s need to receive medical treatment in another city or state, as well as for travel expenses of a caretaker accompanying the disabled person to make the trip possible.

How Can Oren Ross & Associates Help?

Whether for immediate assistance with a current SNT or with general questions about how best to plan to care for your loved one with special needs, Oren Ross & Associates is eager to help in any way it can. So, if you want to learn more about a special needs trust, whether for yourself or for another, and see if this is the right option for your family, contact the team at Oren Ross & Associates by calling (678) 250-4281 and scheduling a consultation. We are delighted to answer any questions you may have regarding SNTs, and we look forward to serving you!