Special Needs Trusts
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Barrington IL Lawyers for Special Needs Trusts

Elder Law and Estate Planning Attorneys in Inverness, Palatine, and All Surrounding Areas

If you have a loved one born with special needs, or who suffered a permanent debilitating injury, planning for their future care and quality of life is important. Financial resources for those with special needs assist the family, friends, and care providers' to aid and support a disabled individual. Establishing a special needs trust (SNT), also referred to as a Supplemental Needs Trust, is a means of allowing someone with a disability to obtain assets and income while maintaining their eligibility for government assistance benefits for the disabled. At Lucas Law, we have advised clients on issues such as estate plans, elder law, and disability concerns for over 35 years.

Advantages of Special Needs Trusts

Those who are disabled may be eligible for critical public assistance programs such as monthly SSI income, health coverage through Medicaid, and federal housing assistance. The majority of these programs have limits on assets or income that are necessary to qualify. For example, those with assets over $2,000 in value are denied SSI income benefits; therefore, if a $5,000 gift was made directly to a disabled party, it would cause them to exceed the asset limitations.

Most commonly, an SNT is created by a love one, who serves as the trustee. The named trust will establish a bank account which can house assets or income for the disabled beneficiary. Trustees have obligations to use funds exclusively for the disabled individual's benefit. An SNT may protect from Medicaid estate recovery, which allows the state, who has been paying for the health care of the recently deceased, to collect the remaining value in an estate to recoup costs.

Funding Special Needs Trusts

Funding may be conducted from a variety of sources including inheritances, assets, gifts, IRAs, annuities and more. In usage of a liquidated IRA, the 10 percent penalty for early withdrawal that may ordinarily apply may be subject to an exemption based on disability. There are scenarios where an SNT must have the state named as the "reminder" or ultimate beneficiary, to avoid ineligibility for some types of assistance. If the beneficiary is under age 65 and living in their home, it may make sense to have the trust assume home ownership, allowing for proceeds from any sale to enter the trust.

Disbursement Restrictions

A trustee may use funds from the trust to:

  • Vendors
  • Reimbursement to a party
  • A gift card for the beneficiary (SSI limitations may apply)
  • To purchase, maintain, repair, and insure a vehicle; of which the trust is a lienholder.
  • Funding of reasonably priced vacations, as well as costs for flights, lodging and ground transportation.
  • To satisfy property obligations such as real estate tax, maintenance, and insurance.

Disbursements that may negatively impact benefits such as SSI:

  • Payment of food costs (thought to be covered by SSI or food assistance programs)
  • Payments to the guardian of a beneficiary
  • Rent, unless the rent consumes over 1/3 of their monthly SSI amount

Contact Our Barrington IL Attorneys

Special needs trusts are an excellent tool for those who are eligible. Due to the overall complexity, the potential for denial of assistance program benefits, and continuous legislative changes, plans should be developed with aid from an experienced lawyer. At Lucas Law our attorneys are skilled in providing legal solutions in estate administration, planning, wills, trusts, guardianships, and more. Please contact our office today at 847-381-8700 to speak with a member of our team.

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