Special Needs Trust
A trust that is created for the sole purpose of providing for a disabled beneficiary those services and materials/equipment that are not provided by Medicaid or government entitlement programs.
Purpose of special needs trust
The purpose of a special needs trust is to establish a source of money to provide these extra or supplemental needs without undoing the beneficiary's eligibility for Medicaid or other government entitlement programs.
Two Types of special needs trust
- Third Party Special Needs Trust - created by a parent, grandparent or legal guardian of the disabled beneficiary. This trust is ideal for a child who is born with or develops a serious disability under non-tort circumstances. The trust specifies what happens to the trust fund balance upon the death of beneficiary. The remaining assets in trust do not have to repay Medicaid for services provided to the now deceased beneficiary.
- Self-Settled Special Needs Trust - Created by a legal guardian (who could be parent or by the court in a court approved settlement) where the money or assets used to fund trust belong to the disabled person. The trust fund balance must first be applied to re-pay Medicaid or other government entitlement programs for their expenditure on behalf of the beneficiary.
What types of services are considered Special Needs?
- Telephone bills for calls between beneficiary and family
- Dental care
- Motorized wheel chair
- Magazine subscriptions
- Vacation for beneficiary
- Medical payments for services not covered by Medicaid
- Travel expenses to visit family members
- Therapy and rehabilitation
- Life-insurance premiums
- Services for caretakers to accompany beneficiary on outings
- Extra cost for private room in medical facility
- Televisions
- Computer
- Customized furniture
- Hobby supplies
- Movies and books
- Pre-need burial
