A Special Needs Trust can be established for a person with disabilities from birth, afflicted during their lives or resulting from an injury, in order to provide for their supplemental needs without forfeiting benefits provided by Social Security, Medicaid or other sources that may be need based. The disabled person can receive gifts, inheritances and personal injury settlements into a trust without loss of entitlement to other benefits. The funds must come from third parties and be subject to the control of a trustee capable of properly investing the funds and administering the trust for the benefit of the disabled person.
While trust funds are generally intended to be for therapies, medical care, disability aids and other goods and services related to the disability, with proper justification and documentation they can also be used for enhancing the beneficiary’s life and living conditions, like adaptations to vehicles and residences, trips and improved housing. Although trust assets cannot be used for “luxuries,” a hot tub could also be a therapeutic aid for a disabled person.
Trust funds can be used for estate planning and burial expenses. Any balance in the trust on the beneficiary’s death may be subject to a claim for reimbursement from governmental entities for the cost of the services they provided, with the remaining balance payable to the beneficiary’s heirs or as provided in the trust.
Anyone looking to provide for a disabled person or someone receiving compensation for a disabling injury should evaluate whether a Special Needs Trust would be beneficial to prevent the loss of other benefits or entitlements.
A Special Needs Trust can be a lifesaver for a disabled person and a great relief for caregivers, but the rules are complex and experienced legal and financial advice is recommended. The attorneys at Brooks, Tarulis & Tibble, LLC have experience evaluating the needs and benefits of a Special Needs Trust, as well as creating and administrating them. Please contact us with any questions.
This Brief is designed to provide our friends and clients with information regarding the various subject matters covered, it is not designed to take place of legal, accounting or other professional advice. If expert assistance is required, the services of a competent professional should be sought. This memorandum may constitute advertising under the rules regulating Illinois attorneys.