If you currently provide care for a child or loved one with special needs (such as mental or physical disabilities), you know what it’s like to worry about what may happen to him or her when you are no longer able to serve as the caretaker. You’ve devoted so much time to making sure that your loved one with a disability can thrive. No one likes to imagine what might happen when they are gone, but fortunately, there are options to ensure that the quality of life your loved one enjoys will be maintained for their lifetime.

While you can certainly plan for them to receive money and assets upon your passing, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs. If you do not leave them any assets, the benefits provided by these and other programs are generally limited to the bare necessities such as food, housing and clothing. As you can imagine, these limited benefits will not provide the resources that would enrich your loved one’s life. Fortunately, the government has established rules allowing assets of the individual with special needs to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust without resulting in disqualification for SSI and Medicaid, as long as certain requirements are met.

At New York Legacy Lawyers, our team can help you set up a Special Needs Trust so that your loved one will retain government benefit eligibility, while at the same time providing assets that will meet the supplemental needs of the person with a disability (that go beyond food, shelter, and clothing, medical and long term support and Medicaid services). In fact, the Special Needs Trust must be designed specifically to supplement public benefits rather than replacing them. Funds from the trust cannot be distributed directly to the disabled beneficiary. Instead, it must be disbursed to third parties who provide goods and services for use and enjoyment by the disabled beneficiary.

The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s eligibility such as:

  • Annual check-ups at an independent medical facility
  • Attendance of religious services
  • Supplemental education and tutoring
  • Out-of-pocket medical and dental expenses
  • Transportation (including purchase of a vehicle and vehicle maintenance)
  • Purchase materials for a hobby or recreation activity
  • Funds for trips or vacations
  • Funds for entertainment such as movies, shows or sports games.
  • Purchase of goods and services that add pleasure and quality to life. This may include computers, furniture or electronics.
  • Athletic training or competitions
  • Special dietary needs
  • Personal care attendant or companion 

If you have a loved one with a disability that you hope to provide for after your passing, establishing a Special Needs Trust is a critical way that you can ensure they will continue to have the quality of life they deserve. Generally, Special Needs Trusts are either stand alone trusts funded with a separate asset like a life insurance policy or they can be structured as a sub-trust in your existing living trust.