Special needs trusts are simple and yet oh so complicated, like almost everything devised by the government. They are a wonderful tool for parents and others to provide money to use for a disabled child while protecting the child’s eligibility for Medicaid and SSI (social security benefits). They can hold any amount of money and that money can be used to supplement the benefits received from the government and thereby, it is hoped, enhance the quality of life of the individual.
The money cannot ever, however, be used to pay for items that the benefits are intended to cover, without causing some reduction in, or sometimes loss of, the benefits. This includes things like:
Cash given directly to the beneficiary for any purpose
Food or groceries
Restaurant meals (except if given as an occasional gift)
Rent or mortgage payments
Utilities such as electricity, gas, and water
Utilities hookup or connection charges
On the other hand, a special needs trust CAN make contributions to an ABLE account, and the ABLE account CAN be used to pay for many of the items the Trust cannot pay for. See? Simple and yet complicated all at the same time.
Parker Counsel Legal Services serves families in Central Texas, Western Massachusetts, Northern New Jersey, and the New Hampshire Seacoast with special needs estate planning, special needs trusts, and guardianships. Contact us for a consultation at 833-RED-BOOT (833-733-2668) or firstname.lastname@example.org