Ohio residents who have loved ones with disabilities have many options when it comes to ensuring that their long-term care and financial needs are met. A special needs trust is one estate planning tool they can use. The funds set aside in a special needs trust can be used to address certain needs that are not covered by Security Supplemental Income or Medicaid.
The federal and state programs that provide benefits for people with disabilities are generally only concerned about meeting the critical needs of the disabled person. With a specials needs trust, parents and other concerned parties can allocate funds to be used for a disabled person who would still be able to qualify for and receive means-based Medicaid and SSI benefits. These two benefits programs places restrictions on the income of the recipients and require that the assets they have are not valued over $2,000.
A special needs trust is also useful in safeguarding a disable person against financial abuse. The provisions of the trust can dictate how the funds are dispersed to ensure that they are not misspent.
The funds in a special needs trust can be applied to expenses related to vision and dental services as well as recreational activities. However, if the beneficiary receives the funds directly, the funds can be considered as income, which can reduce their benefits amounts or disqualify them from their programs.
Multiple factors determine how much funds should be placed in special needs trust. They include the type of disability the beneficiary has and how much care they require.
An estate planning attorney may assist clients with establishing a special needs trust for a disabled loved one. Assistance may be provided with drafting provisions that allow the funds to be distributed without affecting the beneficiary’s eligibility for federal and state benefits.