Special Needs Trusts

The primary advantage a special needs trust offers over a direct gift or inheritance is that, if arranged properly, the assets in the trust do not actually belong to the beneficiary. In this way, the trust can provide benefits to an individual but not cause the individual who is disabled to be disqualified from government programs.

A special needs trust holds title to property for the benefit of a child or adult who has a disability. The special needs trust can be used to provide for the needs of a disabled person and to supplement benefits received from various governmental assistance programs.

Special needs trusts typically provide for:

• medical and dental expenses
• eye glasses
• annual independent checkups
• transportation (including vehicle purchase)
• equipment
• training programs
• maintenance
• education
• insurance (including payment of premiums)
• rehabilitation
• essential dietary needs

Special needs trusts also may allow a trustee to give the beneficiary money for:

• various forms of entertainment (e.g., movies)
• electronic equipment
• trips and vacations
• computer equipment
• athletic training and competitions
• companion services/home health aide
• other items to enhance self-esteem
  

A trust can hold cash, stocks, personal property and real property. It can own and/or be the beneficiary of life insurance. Special needs trusts also can be used to protect personal injury settlements or judgments from jeopardizing government benefit eligibility. Most importantly, special needs trusts can help parents coordinate their estate plans and provide peace of mind that their child will be provided for.