Atlanta Special Needs Trust Attorneys Helping Families Protect the Future of a Disabled Loved One

A special needs trust is created for an individual who is mentally and/or physically disabled and eligible to receive government benefits, such as SSI or Medicaid. The purpose of a special needs trust is to provide the beneficiary with supplemental income and assets without affecting their eligibility to receive SSI checks or any other government assistance. It is important to understand how a special needs trust works and its advantages and disadvantages. Below we answer a few common questions to better equip your decision in planning for the future of your loved one.

What are the Different Types of Special Needs Trusts?

There are two different types of special needs trusts, commonly referred to as first-party and third-party special needs trusts (SNTs). If the assets are owned by the disabled beneficiary, either as a result of a court settlement, inheritance, or in the case of a beneficiary who owned property and assets before becoming disabled, a first-party SNT will be needed because the beneficiary would likely be disqualified from receiving SSI benefits due to owning those assets. The beneficiary can then use the money and assets in the trust to cover expenses that SSI benefits do not cover, and after the beneficiary dies, the remaining trust funds must be used to reimburse the state’s Medicaid agency, and any amount left after government reimbursement can then be distributed to heirs.

If the assets destined for the trust are owned by anyone else other than the disabled person, then a third-party SNT will be needed. Third-party special needs trusts are usually set up by the family of the disabled beneficiary, and it can include a myriad of assets, such as real estate, stock, and bonds, to name a few. It provides the same benefits of a first-party SNT without the Medicaid payback requirement, allowing remaining trust assets to be distributed to other family members or charity after the disabled beneficiary dies.

What Can the Money in a Special Needs Trust Be Used for?

Special needs trusts can be used to provide supplemental financial support to improve the beneficiary’s quality of life. Because SSI benefits are only meant to cover basic needs, such as food and housing, the assets in a special needs trust may allow the disabled person to purchase and maintain a home and a vehicle, allowing them the freedom of taking care of him or herself to the best of his or her ability. Additionally, assets can also be used for other extra expenses, such as tuition for schooling—be that the local community college or a more prestigious university—vacations local or remote, cable and phone bills, and any other supplemental care not covered by Medicaid.

How Should the Payments be Handled?

It is important to highlight the fact that the beneficiary should not receive trust money in cash or check form. Any cash or check taken from the SNT and given directly to the beneficiary—even if it is meant for bill payments, for example—becomes taxable income that affects his or her eligibility for SSI. So, while the special needs trust covers extra expenses like phone bills, payments must be made directly from the trust instead of through cash or check payments to the beneficiary, as doing otherwise would defeat the primary purpose of the trust. This is why having a reliable and honest trustee who can make payments on the beneficiary’s behalf is so crucial.

How Do I Set Up a Special Needs Trust in Georgia?

Setting up a special needs trust can be a straightforward process when you work with a seasoned Estate Planning Attorney in Atlanta who can help you select the correct type of SNT for your loved one. The first step is to determine whether you need a first-party or a third-party SNT. You will also need to designate a trustee to manage the trust funds and report to government agencies. Special needs trusts also require you to assign an advocate that will work with the beneficiary and assist in making decisions and determining disbursements.

At Oren Ross & Associates, we help Atlanta families secure the future and well-being of their disabled loved ones through well-structured special needs trusts. We understand how challenging and overwhelming it may feel to try and plan for the future and account for all the what if’s that your loved one with special needs may encounter along the way. With early planning and with the help of a seasoned team of estate planning attorneys, however, you can make the right choices confidently and with ease. If you are looking for solutions to ensure your special needs child or relative will be taken care of, consult our office today by calling (404) 436-1752 and scheduling a consultation. We look forward to helping you!