A special needs trust is typically created to ensure that a beneficiary who is disabled or suffers from incapacity can enjoy the use of property which is intended to be held for their benefit. The main use of a special needs trust is to avoid a beneficiary from losing access to essential government benefits such as Supplemental Security Income (SSI), Social Security Disability Insurance (SSD), or Medicaid. These needs based government programs offer support to disabled individual. As such, if a large some of money such as inheritance or lawsuit proceeds is given directly to the person receiving the government benefits, it could jeopardize their eligibility for these programs or be taken by the government. The loss of these government programs may be devastating to a person with significant disabilities.
A special needs trust allows money to be put in a limited trust for the person's benefit without jeopardizing the persons ability to receive benefits. However, the special needs trust needs to comply with certain restrictions as not to jeopardize the person's ability to continue receiving government benefits.
Third Party Special Needs Trust or Supplemental Needs Trust
A third party special needs trust or supplemental needs trust enables you to set money aside on behalf of a disabled child or elderly person. A beneficiary of a special needs trust does not have the legal right to claim the property in the trust. That means that the trust assets are not countable resources and do not affect the beneficiaries’ eligibility for benefits. As a result, the beneficiary is able to continue receiving government benefits, while still enjoying the benefits of the property in the trust for supplemental needs. The special needs trust may only be used for supplemental needs above and beyond what government or private agencies provide. An appointed trustee makes the distributions and the disabled person cannot have access or control of the trust property.
For questions on Texas Probate matters, please send an e-mail message to Texas Probate and Trust lawyer Jason S. Coomer at firstname.lastname@example.org or use our contact form.