Special needs trusts are essential for many different reasons, including protecting beneficiaries and their healthcare benefits. Some families don’t recognize the need for a special needs trust, and others who know they need it may be unprepared to go through the process and what it impacts.
Our goal is to help ensure that we can provide those who need us with the answers they need to understand their options better. Below, we will answer some of the more common questions we receive about special needs trusts and give you the information you need.
These are 5 questions we often receive:
- What are the different types of special needs trusts?
- Does a special needs trust affect SSI?
- Who funds a special needs trust?
- What can you spend special needs trust money on?
- What is the difference between a supplemental needs trust and a special needs trust?
If you need a special needs trust, we’ll be here to help you! Call us today at (888) 988-5503.
1. What are the Different Types of Special Needs Trusts?
There are three different types of special needs trusts that we can help you with, including the Legacy Enhancement pooled special needs trust, third-party special needs trusts, and first-party special needs trusts. Here’s what they are:
- Pooled special needs trusts: A non-profit organization is responsible for managing these special needs trusts rather than a singular trustee. The organization manages accounts separately for each beneficiary.
- Third-party special needs trusts: Someone other than the beneficiary is responsible for establishing these types of trusts. For instance, a family member may set up the trust for someone who has special needs.
- First-party special needs trusts: The person with special needs funds a first-party special needs trust. This type of trust allows the disabled individual to obtain funds without impacting other benefits they receive through government entities.
2. Does a Special Needs Trust Affect SSI?
One of the most significant advantages of a special needs trust is protecting additional benefits the disabled party receives from government entities. One of those benefits is supplemental security income (SSI). A special needs trust means the disabled individual will qualify to receive income and other benefits while having their trust funded.
3. Who Funds a Special Needs Trust?
A special needs trust can receive its funds from numerous sources. For instance, a loved one can fund a third-party special needs trust, while the disabled individual may fund their own first-party special needs trust. A pooled special needs trust may receive funds from a settlement, such as a legal verdict, inheritance, divorce, etc.
4. What Can You Spend Special Needs Trust Money On?
A trust can pay for anything detailed within the trust document that enhances the quality of life for the disabled individual. A special needs trust supplements additional benefits provided by government programs such as SSI, but the trust can pay for:
- Additional medical care not covered by government programs
- Therapy programs
- Entertainment and recreation
- Specialized medical equipment
The beneficiary of the trust should not use the fund for items and care already covered by SSI, Medicaid, and other government assistance programs.
5. What Is the Difference Between a Supplemental Needs Trust and a Special Needs Trust?
There’s no real difference between a supplemental needs trust and a special needs trust. Essentially, they are trusts available for a trustee to provide income to a disabled individual in a way that doesn’t interfere with government assistance eligibility.
At Legacy Enhancement Trust, we prioritize those who need us most. We work to determine what type of special needs trust works best for you and provide you with caring and compassionate guidance to ensure you make decisions that work best for your situation.
Call our team today at (888) 988-5503 and learn how we can help you!