Individuals with disabilities may be entitled to Supplemental Security Income ("SSI") and/or Medicaid benefits when he or she becomes 18 years of age. SSI is a federally funded program that provides monthly checks to individuals with disabilities to meet their basic needs: food, shelter, and clothing. Medicaid provides access to adult services as well as health insurance to individuals with disabilities. To be eligible for these benefits, the individual with a disability must have minimal or no income and have resources totaling less than $2000.
Due to the strict financial requirements imposed by the government, it is highly recommended parents create a proper estate plan to ensure that your loved one continues to qualify for government benefits after they die. Through a Special Needs Trust ("SNT"), family and friends can leave money to their loved one with special needs to supplement services provided by the government without jeopardizing his or her benefits.
- There are two types of Special Needs Trusts:
- First Party or Self-Settled SNT: this trust is funded with the assets of the special needs individual often with the proceeds of a personal injury award. By creating this trust, the individual with the disability may still be eligible for government benefits while he or she is alive. However, Medicaid will attach a lien on the trust which will be repaid upon the death of the beneficiary with the trust remainder.
- Third Party SNT: this trust is funded with the assets of friends and family members for the benefit of the special needs individual. While this trust can be funded while the donors are alive, it is usually funded upon their death. This trust is not subject to the "Medicaid Payback" provision, so the remaining assets can be designated to beneficiaries named under the trust.
Freeman Law Offices, LLC is here to develop a plan that fits the unique circumstances of each family. Please feel free to contact us to determine how we can help devise a plan that is right for you.