Watching a loved one deal with a chronic illness or disability can be disheartening. This person may need ongoing specialized care, which can be costly. Families and individuals in Florida usually end up having to empty their life savings to even qualify for government programs. Using a special needs trust can preserve a person’s wealth while also making sure that he or she gets the right help.
Programs like Medicaid, Social Security Disability Insurance and Supplemental Security Income are income-based programs for people with special needs. These programs define a special need as a chronic illness, or a mental or physical disability. This means that if a family member wants to provide money for a family member’s care, doing so can hurt the recipient’s eligibility for such programs. This is especially troubling since the cost of care may exceed the amount that family are willing or able to provide.
Instead of giving the money directly to the individual, a person can instead use a special needs trust. While the loved one with special needs might be the beneficiary of that trust, he or she does not technically own any of the funds — the trust does. The family member who creates the special needs trust can also manage it and distribute funds as needed.
Special needs trusts do have limitations, though. For example, it is not possible to create a special needs trust for a beneficiary who is over the age of 65. Trust funds usually cannot pay for things like shelter or food, either. Instead, the money should go toward the beneficiary’s care.
While the term special needs trust might make it seem as if there is only one type, there are actually multiple versions. Florida families might understandably feel lost when trying to figure out how to set up a trust for a loved one. Instead of heading into the process feeling confused, it can be helpful to speak with an experienced attorney beforehand.