The cost of caring for a loved one with special needs can be astronomical. While Medicaid and Supplemental Security Income (SSI) can provide for a disabled family member's basic needs, these means-tested programs have strict income limits. A special needs trust (SNT) can be established to supplement your loved one's government benefits and pay for life-enriching luxuries and activities not available through state or federal entitlements.
However, there are equally strict rules governing how the trustee for an SNT can use the funds held for the disabled beneficiary. Misuse of special needs trust funds could result in a reduction of their monthly benefits. Don't risk it.
Keep reading to find out how to use SNT funds to enhance your loved one's enjoyment and quality of life without jeopardizing the SSI or Medicaid benefits they need to survive, as well as how the conscientious, compassionate, and capable special needs planning attorneys with Cucinelli Geiger, PC can assist you with trust formation and administration.
Special Needs Trust Funds Can't Be Used to Pay for Basic Needs
Special needs trusts are intended to supplement a disabled individual's government benefits, not replace them. As a result, you can't use money from the trust to pay for anything that SSI or Medicaid covers or may cover in the future, which essentially rules out all necessities. If you spend trust funds on anything that is a basic need, it could be considered "income" or a "countable asset" for the purpose of determining your loved one's eligibility for means-tested programs. Understanding what you can't pay for with trust money is absolutely imperative. Examples include:
- Rent or mortgage payments
- Utilities like electricity, gas, and water
- Hookup or connection charges (for utilities)
- Property taxes
- Homeowners or condo association dues
- Homeowners insurance (when coverage is required in the mortgage agreement)
- Medical treatment covered by Medicaid
- Food (either from restaurants or grocery stores; however, the occasional meal out is allowed as a "gift")
- Direct cash payments are always prohibited
- Debit cards, gift cards, or other cash equivalents
- Gifts given to others on behalf of the disabled beneficiary
Funds in an SNT Can Be Used to Pay for Things That Improve the Beneficiary's Quality of Life
The trust can pay for extras, frills, and luxuries that enrich your loved one's quality of life and enhance their dignity, productivity, and comfort because these are considered non-countable assets. Examples include:
- One home
- One vehicle
- Home furnishings
- Cell phone
- Job training
- Experimental or alternative therapies
- Vitamins and supplements
- Massage therapy
- Summer camps
- Travel expenses (excluding food costs)
- Yoga classes
- Gym membership
- Cable TV or streaming services
- Tickets to special events
- Transportation costs
- Home improvements
- Academic or recreational classes
- Non-food grocery items (like laundry or hygiene products)
- Pets and pet supplies
- Estate planning services
Though extensive, the above list is far from exhaustive. If you are not sure if an expense you're considering could jeopardize your loved one's benefits, don't risk it. We can help.
Experienced Virginia Special Needs Planning Lawyers
Leave the guesswork out of special needs trust establishment and administration. At Cucinelli Geiger, PC, we'll carefully assess your situation and help you determine which type of special needs trust is right for your disabled family member. We'll be there with you each and every step of the way—from advising you on options for funding the trust to evaluating your loved one's current and future care needs.
Find Out How We Can Help You Achieve Your Goals
Contact us today to schedule an appointment to discuss your special needs planning concerns and goals with a member of our accomplished legal team. The help you need is just a click away.