The public assistance available to a person with ongoing medical needs, or an individual who struggles with intellectual disabilities, can be vital to their well-being. However, your concern over a loved one's eligibility for funds can interfere with your desires to help them financially. A Special Needs Trust can be set up to provide meaningful financial support while not interfering with public assistance. This trust can be established on someone's behalf, but it is also possible for you to create a trust for yourself. With that said, if you want to set up your own trust, it must be managed by another party. If someone has control over the distribution of their trust, it can interfere with their claim for public assistance.
The goal in setting up a Special Needs Trust is to supply income to a person receiving public assistance, without damaging their claim to assistance. The trust typically covers expenses that help improve a person's quality of life in multiple ways. It is not meant to address the sort of costs that might be addressed through Medicaid, Medicare, or another public assistance fund. It can be used for medical costs that are not being covered by these funds, and it can also make it easier for someone to enjoy leisure and cultural activities that improve their daily life.
A Special Needs Trust is meant to make a person's life better by providing financial support that does not intrude on assistance. You could consider these funds a way to cover the cost of luxury items, or a way to pay for support that public benefits normally refuse to provide.
When it comes to paying for food and housing, a Special Needs Trust can affect some of what a person earns from government assistance. In fact, you may discover that this loss is relatively minor compared to the amount of support your Special Needs Trust is able to give. An attorney with experience establishing these trusts can help you navigate the potential costs and consequences of providing support for dining out, or for rent.
A Special Needs Trust can be flexible with respect to what it covers, but it needs to be clear that the beneficiary is NOT in control of their trust. Even if the beneficiary is the person creating the Special Needs Trust, a trustee must be responsible for distribution of funds. If a beneficiary (or a person acting on their behalf) is able to amend the distribution of funds, or if they receive direct cash, their eligibility for public assistance will be compromised.
A lump sum award can help improve your life significantly after an injury, but it can also interfere with your public benefits. Turning this sum into a Special Needs Trust can allow you to keep it, and preserve access to assistance. A legal expert can help you navigate this situation so that your award provides help to you over the years while you also collect your benefits.