Supplemental Needs Trusts: What You Need To Know
A supplemental needs trust, or an SNT, is a legal arrangement that provides for the financial well-being of an individual with disabilities while also allowing them to receive government benefits. This type of trust is designed to supplement the government benefits that a disabled individual is receiving, rather than replacing them. This is a crucial part of estate planning if you have a loved one or dependent who has special needs and will need funding after you pass away. Here are some things you need to know:
What Does an SNT Do?
The purpose of an SNT is to ensure that an individual with disabilities is able to receive the support they need without jeopardizing their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI). These benefits are often critical to the well-being of individuals with disabilities, as they provide access to essential healthcare services and financial assistance.
How Does an SNT Work?
The assets placed in an SNT are managed by a trustee who is responsible for administering the trust in accordance with the wishes of the person who created it. The trustee can use the funds in the trust to pay for expenses that are not covered by government benefits, such as education, recreation, or travel.
Is an SNT Beneficial?
One of the key benefits of an SNT is that it allows individuals with disabilities to maintain a higher quality of life by providing them with access to resources that might otherwise be unavailable to them. For example, an SNT could be used to pay for a wheelchair-accessible vehicle, which would greatly enhance the individual's ability to get around and participate in activities outside the home.
What Types of SNTs Are Available?
There are two main types of SNTs: first-party and third-party. A first-party SNT is funded with the assets of the individual with disabilities, while a third-party SNT is funded with assets from someone else, such as a parent or grandparent. In both cases, the assets in the trust are not counted as income or resources for the purpose of determining eligibility for government benefits.
How Do You Create an SNT?
Creating an SNT can be a complex process that involves legal and financial considerations. It is important to work with an estate planning attorney who has experience in this area of law and can help guide you through the process.
This type of trust can greatly enhance the quality of life for individuals with disabilities by providing them with access to resources that might otherwise be unavailable to them. If you are considering creating an SNT, it is important to consult with an attorney who can help you navigate the process and ensure that your wishes are carried out.
Contact an estate planning attorney to learn more.