A special needs trust, sometimes referred to as a supplemental needs trust, is a specific type of trust used to provide support for a special needs individual. This exceptional estate planning tool should be considered by anyone who has a child or loved one who qualifies. So what is a supplemental needs trust and why would I want to create one?
- A Special needs trust, or SNT, may be used for an individual who is physically or mentally disabled or who suffers from a chronic or acquired illness.
- A parent, grandparent or guardian may set up an SNT.
- A SNT is intended to provide supplemental care above and beyond that which is provided by government sponsored programs such as Medi-Cal (Medicaid), SSI or public housing.
- A SNT will not disqualify the beneficiary from government assistance programs. A SNT is specifically intended to allow a beneficiary to qualify for these programs while still having access to additional means of financial support.
- Absent an SNT, any funds used to care for the individual could jeopardize his or her eligibility for government assistance programs.
- A SNT will continue to operate after your child reaches adulthood.
- A SNT will also continue to operate after your death if you wish.
- Although you may appoint yourself to be the trustee of the trust, this is not the same as being your child’s legal guardian.
- Very specific language is required to draft a proper SNT. Be sure to consult with an experienced and qualified planning attorney if you are interested in creating a SNT.
Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes.
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