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Guide on Special Needs Trusts for People with Disabilities


March 31, 2016

Special needs estate planning is essential to parents with children with disabilities. At some point in their life when children with special needs require government benefits such as Medical Assistance (Medicaid (M.A.) or Title XIX) or Supplemental Security Income (SSI) a parent's estate could prohibit their child from being eligible. The Special Needs Trust is a contract which allows parents or another person to financially supplement a person with a disability without conflicting with the government welfare benefits.

There is much to consider when financially planning for your special needs child. New Horizons Un-Limited hopes that the options presented in this guide will educate you on special needs trusts and help make benefiting from their parent's estate a possibility for individuals with disabilities.

New Horizons Un-Limited assumes no responsibility in guaranteeing the services, programs or conditions as described. Consult an attorney, preferrably one who is familiar with your state regulations and special needs trusts laws, and who can evaluate your financial and special needs situation. If you are interested in a resource listed below, check it out, call or contact the resource to verify the current situation. Evaluate information and make your own decisions when using this guide.

Following is a quick outline of this guide, click on the link to go directly to the section of your choice:

What is a Special Needs Trust?

People with disabilities who apply for public assistance such as Medicaid and Supplemental Security Income (SSI) from the government must go through a "means testing," a determination to see if they are eligible based on their income and assets. An individual cannot be eligible if they have more than $2000 in available assets. If a person with disabilities has more in assets, they must spend their assets down before they can apply for assistance and/or keep their assets below $2000 while on assistance. With traditional inheritance or trusts, if parents, grandparents or other family members allow thier assets to be inherited by their special needs relative through the normal laws of inheritance, they could cut the person with disabilities out of their government benefits. This also applies to those on SSDI.

The Special Needs Trust is a contract which allows parents or another person to financially supplement a person with a disability without conflicting with the government welfare benefits. Under the Medicaid law, Omnibus Budget Reconciliation Act of 1993 (OBRA-93) one is allowed to create a Special Needs Trust (SNT), in which assets are not counted as income and will not affect the child's eligibility to receive public assistance. The following describes what you and your family members need to know and do now to ensure benefit elegibility for your child with special needs.

What You Need to Know and Do Now to Ensure Benefit Eligibility for Your Child(ren) with Special Needs

Government Assistance

This is the Government Assistance that is available to the child with special needs.

Estate Planning

Is Your Estate Plan in Order?

Do you have an Estate Plan?

Have you designated Advanced Directives?

Before you begin to think about Special Needs Trusts, put your affairs in order.

What assets need to be assigned beneficiaries and which assets should be assigned to fund the Special Needs Trust?

Finding the Right Special Needs Trust

If you have questions or ideas, information and solutions that you would like to share with us, contact us by e-mail at: horizons@new-horizons.org or to use our NHU E-Mail Form or NHU Community Forum, click the links below.

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[Updated March 31, 2016]
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