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Morris County Special Needs Trusts

What Is a Special Needs Trust?

Special needs trusts, sometimes referred to as "supplemental needs trusts," create financial arrangements that allow a person with a disability to receive gifts, inheritances, lawsuit settlements, or other funds while maintaining their eligibility for government services.

At the law office of Levine & Levine, our special needs trust attorney structures these trusts to provide funds to the person with a disability to enhance their quality of life without putting their Medicaid or Supplemental Security Income (SSI) eligibility at risk. Attorney Brett Levine evaluates your financial situation and long-term goals to determine how best to structure a special needs trust for you or your loved one. Stocks, bonds, cash, as well as a home or apartment can all be included in a special needs trust. Understanding how best to allocate these resources requires a full understanding of what a special needs trust can do for its beneficiary.

If you have questions regarding special needs trusts, contact our Morris County estate planning attorney at Levine & Levine today. We can review your financial situation and existing estate plan and discuss the steps you can take to secure your family's financial or healthcare future.

When Do You Need a Supplemental Needs Trust?

In general, there are three different situations in which a supplemental needs trust is established:

  • Established by Disabled Beneficiary: A special needs trust can be established by the disabled beneficiary himself, using his own resources. No Medicaid or SSI eligibility penalty is incurred. However, once the beneficiary passes away, the State can recover the cost of the beneficiary's Medicaid expenses from the remaining funds in the trust. Even so, by law, there is no limit to the amount of income or principal that can be paid by the trust for the beneficiary while he is alive.
  • Established by a Parent: Parents concerned about a disabled child's welfare can establish a supplemental needs trust without jeopardizing the child's Medicaid and SSI benefits. In this situation, a parent can transfer assets to the trust confident that should they pass away first, their child's future will be taken care of by the assets in the trust. Additionally, under these circumstances when the beneficiary dies, Medicaid cannot recover its costs from the trust. A parent can indicate how the funds are to be allocated in the event of the death of the beneficiary, perhaps transferring them to another child or loved one.
  • Transferring Assets by the Disabled Beneficiary: Under the law, a disabled person can choose to transfer his assets to a supplemental needs trust arranged for another disabled person under the age of 65. Doing so will not disqualify the person who creates the trust from receiving Medicaid nursing home or in-house care benefits.

Depending on the situation, who arranges a supplemental needs trust can make a difference in what money is recovered — if any — after the beneficiary passes away.

What Can a Special Needs Trust Pay For?

It is a common misconception that special needs trusts can only pay for items that are medically necessary to a person with a disability. In reality, special needs trusts are designed to enhance the quality of the beneficiary's life. Special needs trusts can pay for things like

  • A home or vehicle
  • Educational expenses
  • Electronics or appliances
  • Vacations or hobbies
  • Additional therapy or counseling services
  • Ongoing bills such as phone or internet
  • Among others

Special needs trusts are not intended to replace basic support but should supplement government programs that provide essentials such as food, clothing, shelter, and medical care. If you have questions about setting up or using a special needs trust, contact our Morris County estate planning attorney today.

Special Needs Trusts — Providing for the Future

If you have questions regarding how you can use a special needs trust to secure a family member's future, contact our estate planning attorney at Levine & Levine today. Our knowledge of trusts, finances, and Medicaid law places our firm in a strong position to assist individuals in these matters.

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