Special needs trusts can fund more than their name implies. Importantly, they can be structured and managed so that trust distributions do not reduce government benefits such as Supplemental Security Income (“SSI”) or Medicaid.
Government benefits generally aim to fund basic living necessities like shelter, food, clothing, and medical expenses. Special needs trusts can supplement these government benefits thereby enhancing the quality of life of a disabled person.
The breadth of disbursements available from a special needs trust is limited by the trustee’s duty to act in the best interest of the beneficiary and by limitations on distributions that would replace governmental benefits already being received. Still, the trustee could purchase a new home, make a down payment on a new home, or fund a security deposit for an apartment.
Domestic appliances, such as televisions, stereos, computers, microwaves, refrigerators, and washers or dryers, can be purchased and maintained with funds from a special needs trust. Domestic services, such as cable television, internet access, house cleaning, and home improvements, can also be funded by a special needs trust. The special needs trust can even put new drapes in the living room, towels in the bathroom, and linens in the bedroom.
Special needs trusts are also flexible enough to support extracurricular activities. They can pay for clubs and dues, massages, tickets to sporting or concert events, and haircut or salon services. They can pay for transportation to the club or ball games, including taxi service, a rental car, a bus pass or even a new car. And, when it is time for a vacation, the trust can also fund travel and lodging.
Special needs trusts are very effective when they are designed and administered correctly. A properly designed and administered special needs trust can vastly improve the quality of life of the disabled beneficiary while still allowing the disabled individual to maintain vital government benefits.
By: Gina M. Barry, Esquire
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