Can a special needs trust help someone with special needs?

There are many physically or mentally disabled senior citizens here in Missouri who depend on government programs such as Social Security and Medicaid. However, if these individuals inherit any monetary assets from a recently deceased family member, they may potentially lose these benefits. So are there ways to bequeath assets to a disabled family member without endangering their ability to remain in government programs?

This is the kind of situation where a special needs trust can help. Special needs trusts can help take care of someone who is either physically or mentally unable to take care of themselves by making sure that the disabled beneficiary does not lose their government benefits. With traditional asset distribution from an estate, the government would consider these assets to be additional income and would require the individual to drop out of any program in which they were enrolled. However, with a special needs trust a trustee, and not the beneficiary, controls all of the assets in the trust. Federal programs like Medicaid cannot consider these assets as the beneficiary's. Therefore, the disabled person is allowed to remain in any government program.

A special needs trust can also protect any proceeds from the settlement of a lawsuit. If the disabled family member was part of a successful lawsuit, then the benefits from that legal action can be placed in the special needs trust for that person. If, in the future, that individual is sued, those benefits that are now part of the special needs trust cannot be part of any settlement.

Special needs trusts can be useful for anyone who has disabled family members. Any Missouri resident who is considering developing a special needs trust as part of their estate plan may want to speak to an attorney in order to fully understand its potential benefits.

Source: "Special needs trust FAQs," Accessed Sep. 28, 2015

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