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SPECIAL NEEDS PLANNING

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group shot 5.jpgSpecial needs planning is essentially the establishment of a Special Needs Trust (also known as a Supplemental Needs Trust).  A Trust is an agreement between the settlor, or the person who funds the trust, and the trustee, the person who controls the assets of the trust.  Although there are many different kinds of trusts, a Special Needs Trust is designed for a specific purpose.  The assets in a trust are protected from any local state or federal government entity who wants to use those assets to defray the cost of any awards or benefits that government entity will provide.  In other words, the assets in the trust are insulated against claims from federal programs such as Medicaid. This means that a person who does not qualify for Medicare, (or persons over 65), may instead become eligible under the Medicaid regulations. 

The trust has to be planned very carefully. A trust can be designed so that the assets are exhausted before the person deceases or no longer becomes eligible for government benefits.  In essence, the government says that the person can keep their assets and have access to their assets under limited circumstances. However, if there is any money left in the trust after the person deceases, then the government may have claim to the remaining assets of the trust.  This planning requires serious thought and consideration before its implementation.  There is no substitute for an experienced attorney who has created many of these Special Needs Trusts.

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