New York Special Needs Trusts Lawyer

It’s the same as a special needs trust. Some lawyers simply prefer to use the term “supplemental benefits” or “supplemental needs” instead. The terms are interchangeable. They describe the trust’s purpose and are not legally different.

Sometimes a recipient of public benefits receives assets that prevent continued benefits eligibility. In this case, it may be possible – and advisable – to place assets into a special needs trust to regain or continue government benefits eligibility.

Anyone. A third-party special needs trust can be established by one person for the benefit of another. The person establishing the trust – called the settlor, grantor or trustor – chooses to make some of his or her assets available for the benefit of the beneficiary with a disability. Third-party special needs trusts are often established by parents for their children with disabilities.

Not everyone with disabilities who receives a large tort settlement needs a special needs trust. A trust is usually necessary only if the person is receiving Medicaid, SSI or other means-tested government benefits. Small settlements may not warrant the establishment and administration of a trust. Other ways can be found to shelter the settlement funds. Even if the person is not currently receiving benefits, a trust must be considered if there is a possibility that the person may receive means-tested government benefits in the future.

A Special Needs Trust holds assets for the benefit of an individual who is receiving or may receive public benefits such as Supplemental Security Income (SSI) and Medicaid. If properly drafted, having assets in a special needs trust does not disturb the person’s eligibility for public benefits.

If you have a child with a disability—and your child is unable to work and hold a job – a Special Needs Trust should be part of your estate plan.

Typically, the trust is funded or receives money only upon your death. Grandparents or other relatives might leave something to this trust, as well. You might also decide to gift or transfer money into the trust while you are living. Doing so raises a number of tax issues about which you must obtain appropriate advice.

Generally speaking, money in the trust can be used to pay for items and services that are not provided to the beneficiary by the public benefits system. For example, money in the trust can buy the beneficiary a television or pay someone to be the individual’s companion while at home or while on a trip.

It is important to have funds segregated and irrevocably devoted to the child with a disability. The brother or sister, however well meaning, could face a divorce or be sued or die before his sibling with a disability. In any of their circumstances, the money could be lost and become unavailable.

The trustee should be someone who is responsible and who will be devoted to the beneficiary. This is often a relative, although it can be a professional fiduciary or professional trustee, if no family member is available. This is a complicated question that you must discuss with your attorney.

If you create this trust for the benefit of your child, money remaining in the trust goes to individuals you name in the Special Needs Trust. It is up to you. Alternatively, remaining assets can go to your favorite charity.