Meet Our Team

 

David Fall Attorney Tampa
David Fall
Associate

dfall@olalaw.com

AREA OF PRACTICE /
Corporate & Tax
Estate & Probate

EDUCATION /
Western New England School of Law, LL.M.
in Elder Law and
Estate Planning, 2016
Univ. of Alabama, LL.M. in Taxation, 2012
Washburn Univ. School of Law, J.D., 2011
California State University, Chico, B.A. in Psychology, 2006

ARTICLES
• Formal vs Summary Administration

• Liquidating An S Corporation

• Surviving Spouses Benefits

• Revocable Trusts and their Benefits

• Do You Prefer "Per Stirpes" or "Per Capita"?

• Special Needs Trusts Preserve Income For The Disabled


  Article:

Special Needs Trusts Preserve Income For The Disabled

Special needs trust, sometimes known as a supplemental needs trust, is a specifically designed trust that allows the disabled beneficiary to benefit from the use of trust property while remaining eligible for needs-based government assistance programs, such as Medicaid. This kind of trust is created so that the beneficiary may supplement their usual income with government benefits when they're unable to pay their living expenses by their own means.

In a special needs trust, distributions of income or principal must be made to preserve the beneficiary's eligibility for needs-based programs. For example, trust distributions can be used to directly pay providers of medical services but should never be made directly to the beneficiary. It is crucial that trust assets aren't used to pay for certain expenses, because the trust may be disqualified and the trust property can be counted against the beneficiary for purposes of qualifying for needs-based programs.

The four most common types of disability benefits are Supplemental Security Income ("SSI"), Social Security Disability Insurance ("SSDI"), Medicaid, and Medicare. SSI and Medicaid are needs-based programs, while SSDI and Medicare are not. Thus, it's generally not necessary to use a Florida special needs trust to preserve SSDI or Medicare benefits.

Unfortunately for those who benefit from needs-based programs, it's easy to be disqualified from these programs. Something as simple as receiving a lump sum of money or assets, such as from an inheritance or court settlement, can disqualify a recipient.

A special needs trust can be monumental in preserving the assets of a disabled beneficiary who receives needs-based government benefits and may be in jeopardy of losing those benefits because of a disqualifying event.

Creating a special needs trust is not much more complicated than creating other types of trusts. But it can be difficult to maintain. Now, thanks to the Special Needs Trust Fairness Act, the disabled person, provided they are mentally capable, can establish and fund their own special needs trust. Before, the special needs trust had to be created by the court or the parents, grandparents, or legal guardians of the disabled beneficiary.

The trust language must follow the laws governing Florida special needs trusts and should direct how trust assets be spent. Specifically, the trust should be designed as a special needs trust under 42 U.S.C. ยง 1396p(d)(4); the trust should state that the settlor's intent is to allow eligibility for needs-based government assistance programs, including SSI or Medicaid, for a disabled person by supplementing those government benefits; that trust distributions may be made in the trustee's sole discretion for maintaining the quality of the beneficiary's health, education, safety, and welfare when not provided by government assistance; and that the trustee will repay all state Medicaid bills upon termination of the trust after payment of estate expenses.

Special needs trusts can be incredibly important and exceptionally complex. Consult with an experienced estate planning attorney before drafting such a trust.







1000 West Cass Street, Tampa, Florida 33606 • 813-254-8998 • Fax: 813-839-4411
Older Lundy & Alvarez © 2018 • Attorneys at Law

The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with
respect to any particular issue or problem. Use of and access to this Website or any of the e-mail links contained within the site do not create an attorney-client relationship between
Older Lundy & Alvarez and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm
or any individual attorney.



Back to Top