what is the money in a special needs trust used for

ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF

WHAT IS THE MONEY IN A SPECIAL NEEDS

TRUST USED FOR?


WHAT IS A SPECIAL NEEDS TRUST?

A special needs trust is created to protect and provide for someone who is disabled.


First party special needs trusts protect the personal assets owned by the person with the disability.


Third party special needs trusts allow someone to give a gift to

someone who is disabled.


WHY IS A SPECIAL NEEDS TRUST NEEDED?


A special needs trust is required because people who are disabled often rely on government benefits (like Medicaid) which are means-

tested.


Having too many resources can lead to a loss of benefits.


When the assets are held in a special needs trust, they aren’t

considered disqualifying resources for purposes of Medicaid

qualification.


USING THE MONEY IN A SPECIAL NEEDS TRUST


Money in a special needs trust is used to provide for supplemental

needs of a person who is disabled.


FOLLOWING THE INSTRUCTIONS OF THE TRUST CREATOR


The creator of the special needs trust can provide instructions

regarding what the money should be used for.


The trust creator has to name a trustee.


The trustee has a fiduciary duty to manage the trust for the benefit of

the beneficiary who is disabled.


PROVIDING FOR ENHANCED QUALITY OF LIFE


A special needs trust can provide enhanced quality of life by paying

for things the person with the disability loves.


Money in the trust could be used to pay for things like transportation,

travel, a new TV for the person with the disability, or much more.


WHAT CAN’T YOU USE A SPECIAL NEEDS TRUST FOR?

There are limits on what money in a special needs trust can be used for.


A person with a disability can’t be given cash or cash equivalents

without losing access to government benefits.


IN-KIND DISTRIBUTIONS


Gift cards and paying for essential things like rent could be considered in kind distributions from a special needs trust and could lead to a loss

of benefits.


GETTING HELP WITH A SPECIAL NEEDS TRUST


A special needs planning lawyer can provide assistance with creating a

special needs trust and determining what the money can be used for.


Visit our website www.sinclairprosserlaw.com

Nicole Livingston

Jon J. Gasior

Colleen SinclairProsser

Victor A. Lembo

what is the money in a special needs trust used for

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