Special Needs Trusts

Sometimes known as Support Trusts or Supplemental Needs Trusts, a Special Needs Trust is created to care for someone with “special needs.”

Generally speaking these trusts are designed for those who are disabled and will need to have assistance from some “needs based” government program for their medical care and/or their financial support. The primary program considered by these trusts is Supplemental Security Income (SSI) from the Social Security Administration.

Giving money to help someone on a government benefits program can often do more harm than good. The problem many people with “ultra sick” children or relatives face is that the government support program is not enough to meet their loved one’s needs. However, if they try to give any support to their loved one, the government benefit will cease until the loved one has run through all they have been given and are destitute again. When this happens, the loved one must re-apply for the government benefits that were terminated and “if approved” they will be back where they started. The major downside is that the approval may take a couple of years if they are approved at all. During that time they have absolutely no support whatsoever. An inheritance can have the same effect.

Special Needs Trusts (or the more restrictive Supplemental Needs Trusts required by some states like Kansas) are very specifically designed trusts that allow additional support to be offered to an ultra sick or disabled loved one without causing the loved one to lose government benefits.

A Special Needs Trust may be drafted into a Revocable Living Trust based estate plan as a subtrust that only comes into being if it is required. (i.e. Your child dies and one of the grandchildren who will inherit in her place has a head injury and will never be able to support herself.) Most often these trusts are drafted as stand alone documents.

These trusts may be funded by cash or other assets of the Trustmaker, donations by third parties, a Life Insurance Trust, a Charitable Remainder Unitrust, a Charitable Remainder Annuity Trust, or just about any other creative (but legal) manner that would fit your unique situation.