Supplemental / Special Needs Planning

If you’re responsible for a child, a spouse, or another dependent family member with disabilities or special needs, it’s essential to plan for their continued care should you become incapacitated yourself or in the event of your passing.

Smith Legacy Law provides thoughtful legal advice and counsel regarding Supplemental Needs Trusts. As your lawyers for life, our skilled and knowledgeable attorneys are ready to help you take the necessary steps to ensure your loved one’s quality of life without jeopardizing their current and future eligibility for Medicaid, Supplemental Security Income (SSI), and other needed public benefits.

Why Consider a Supplemental Needs Trust

Even families with higher-than-average incomes can struggle to afford the care required by a child or other loved one with a disability or special needs. While SSI, Medicaid, and other public benefit programs provide a vital safety net for millions of people, including those with disabilities or special needs, very low financial eligibility requirements prevent many individuals and families from accessing these benefits.

Fortunately, it does not have to be that way. A Supplemental Needs Trust allows a Trustee that you appoint to use the property held in the trust for the benefit of the person with a disability – the beneficiary —without surrendering the beneficiary’s eligibility to receive needs-based government benefits.

Under current guidelines, any assets placed in a Supplemental Needs Trust can be used to enhance or supplement – but not replace – government benefits. If trust assets are used to cover absolute essentials like food, clothing, and shelter, the beneficiary could be subject to as much as a ⅓ reduction in SSI benefits. However, the entrusted assets can be utilized for many other purposes without triggering such a reduction. These include:

• Caregiving, such as a personal attendant or therapies not paid for by Medicaid
• Medical and dental procedures not covered by Medicaid
• Vacations and travel, with or without a paid companion
• Services, such as a cell phone, internet, or cleaning service
• Pet care, including pet food and veterinary care
• Computers and other electronic equipment
• Home appliances
• Specialized vehicles
• Recreation

Types of Supplemental Needs Trust

There are three main types of Supplemental Needs Trust:

• First-Party Supplemental Needs Trust:  A First-Party Supplemental Needs Trust holds money and assets belonging to an individual with a disability. Upon the beneficiary’s death, any remaining trust property must first be paid back to the state where they received Medicaid support. Any other remaining assets are then distributed among named beneficiaries, such as other family members. A First-Party Supplemental Needs Trust is also known as a “D4A Trust” or “OBRA ’93 Trust”.
• Third-Party Supplemental Needs Trust: This trust holds money and assets of anyone other than the beneficiary, such as an inheritance from a parent’s estate. Once it terminates, any remaining assets are distributed among the remainder beneficiaries named in the trust.
• Pooled Income Trust: Operated by a non-profit organization, a pooled income trust allows an individual who has income in excess of Medicaid eligibility limits to nevertheless qualify for Medicaid. The individual contributes their excess income to the trust, which in turn directly pays the individual’s living expenses and bills, with the remainder, if any, paid to charity.

Contact an Experienced Supplemental Needs Planning Attorney Today

There are many considerations when planning for someone with a disability or special needs. The attorneys at Smith Legacy Law will act as your trusted counselors and advisors as you work to draft a Supplemental Needs plan capable of ensuring your loved one derives the maximum benefit possible.

Contact our office today to arrange for your free consultation.