No text or picture Add-ons were added yet. How sad!
A special needs trust is a trust that can be created under federal law whose assets do not count for purposes of qualifying for Medicaid, so a person can take a sum of money or other assets, put it into that trust and still qualify for Medicaid.
To be eligible for special needs trust, a person must meet the definition of disability contain within a social security disability income definition found in the federal statutes so somebody has to be disabled in order to even create a special needs trust. For example, if an injury victim recovered substantial amount of money from a person injury suit, that money could be put into the trust and that person can still qualify for Medicaid. Now a trust is simply a legal document that is drafted by a lawyer that tells a trustee who is a professional money manager on what to do with the money and how to distribute it. So the special needs trust is a legal document that tells the trustee how to make distributions to someone that has been injured but keep them eligible for public assistance Medicaid.
A special needs trust is also a tool that can be used by someone who has a substantial amount of assets but may not have enough money to cover all their future medical care. So those assets can be transferred into the special needs trust and then they can gain eligibility for Medicaid by having all those assets put into the special needs trust. There are some limitations and look back periods where when somebody transfers assets into that trust, there maybe a period of time where they will not be eligible for Medicaid but it is a way to eventually get qualified for Medicaid.
A special needs trust is created, there is typically three steps. One is the drafting or creating of that trust document. Second is the creation of a bank account or a trust account that will hold the assets and then third is the court approval of the creation of the trust because a special needs trust cannot be created by an injury victim themselves. It has to be created by a parent, grandparent court order. So a court order is a going to be necessary typically to create the special needs trust and once the trust is created, the moneys or assets are placed into the trust account and then the trustee will make distributions based on the drafting of the trust documents. So whatever the trust document says the money can be used for those certain things that can be used for which are typically for something to improve the victim’s quality of life.
It is pretty broad but there are some limitations typically, it cannot be spent on food and shelter because SSI pays for food and shelter and so if the trust pays for food and shelter, it can reduce or eliminate the SSI payment which can cause a problem with eligibility for the Medicaid benefits. So while it is flexible, it still has limitations and one of the primary limitations that must be put on understanding is that the money and the trust can only be used for the sole benefit of the trust beneficiary, that injury victim. So they can not take money from that trust and give it to their local church who or something that is going to benefit a greater man or people but the trust asset has to be used for the special needs, supplemental needs of the injury victim.
Transcription by:
Scribe4you Transcription Services