"TO SNT OR NOT TO SNT, THAT IS THE QUESTION" - Should You Establish a Special Needs Trust?

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Shakespeare's well known verse in the play of Hamlet is apropos in the area of public benefits planning. You or a loved one is disabled, and eligible for and receiving public benefits assistance, namely, Supplemental Security Income (SSI) and Medicaid benefits. Your client will soon be the recipient of proceeds from a personal injury settlement, inheritance or other source. What should you do? The answer seems obvious. Establish a special needs trust ("SNT"). Such a trust can be established for an individual who is disabled. Their income and/or assets can be funded, thereby maintaining their eligibility for public benefits and providing a means by which to supplement their needs.

Hold on! Before establishing a SNT, do not forget the requirements under federal law that must be met:

- The individual must be disabled according to Social Security (SSA) criteria;

- The trust must be established before the disabled person reaches age 65;

- The trust must be established by a parent, grandparent, guardian/conservator, or court of law; and

- The trust must provide for reimbursement to Medicaid the cost of medical services it has provided to the beneficiary.

- Determine whether or not there are additional state requirements that must be met as well. Each state may have requirements to comply with their statutes.

Establishment of a special needs trust is actually a relatively simple matter once the decision has been made to create one. What is often not so simple or straightforward is evaluating whether or not an individual's circumstances merit establishment of such a trust or whether the individual will be best served by such a trust.

Please see full article below for more information.

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Published In: Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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