How to Use a Special Needs Trust

Backed by more than 20 years of experience, Joe Modlin helps clients to protect the needs of their loved ones while preserving eligibility for government benefits. Joe Modlin has served as an attorney to a number of clients who have sought his help in preparing special needs trusts.

If your child or another loved one has special needs and depends on you for financial support, you need to consider in advance what will happen after you pass. If the individual in question is receiving government benefits, such as Social Security or Medicaid, an inheritance may be more detrimental than helpful. For instance, a person with special needs who receives Social Security payments may not have assets over $2,000. A simple gift of even $2,001 would cancel the person’s benefits and potentially leave him or her in serious jeopardy.

The Special Needs Trust allows a caregiver or guardian to channel money into a specific account, from which the fund administrator can allocate resources as needed. The fund administrator, also known as the trustee, cannot disburse money directly to the beneficiary, as this would complicate benefits determination, but instead uses the funds to pay for such expenses as personal care, medical expenses, and transportation costs. Because the trustee controls the account, the government does not consider it an asset of the beneficiary; however, the beneficiary still receives the support that the trust makes possible.