Blue Ash Special Needs Trust Lawyers

If you have a loved one with a physical or mental disability and want to ensure they have access to the care and benefits they deserve, you may want to consider establishing a special needs trust as part of your estate planning goals. A well-structured special needs trust can enhance your loved one’s quality of life without jeopardizing their eligibility for government benefits such as Supplemental Security Income (SSI) and Medicaid. The Blue Ash estate lawyers at Wolterman Law Office will assist you in creating a comprehensive special needs trust tailored to your family’s needs.

What Is a Special Needs Trust?

Also referred to as a supplemental needs trust, a special needs trust is a legal tool designed to benefit a person with a disability without compromising their access to government assistance. Many individuals with disabilities rely on SSI and Medicaid for financial and medical support. However, these benefits are income-sensitive, meaning a direct inheritance or financial gift could disqualify them.

By placing assets in a trust instead of giving them directly to the beneficiary, the funds are not counted as the beneficiary’s personal resources, preserving their eligibility for public benefits. A trustee, selected by the person creating the trust, manages the assets and ensures they are used to enhance the beneficiary’s well-being.

What Are the Different Types of Special Needs Trusts?

There are two main types of special needs trusts: first-party and third-party trusts. Both allow a beneficiary to receive financial support without exceeding government benefit income limits.

First-Party Special Needs Trust (Self-Settled SNT or Medicaid Payback Trust)

Established using the assets of the individual with special needs, often from an inheritance, personal injury settlement, or back pay from Social Security.
Can be created by the beneficiary (if legally competent), a parent, grandparent, legal guardian, or a court.
The beneficiary must be under 65 years of age at the time of trust creation.
The trust is irrevocable, meaning its terms cannot be changed.
Upon the beneficiary’s death, any remaining funds must first be used to reimburse Medicaid for benefits received during their lifetime before assets can be distributed to other heirs.

Third-Party Special Needs Trust

Funded by someone other than the beneficiary, such as parents, grandparents, or other family members.
There are no age restrictions for the beneficiary.
The grantor (the person creating the trust) controls how the remaining funds are distributed after the beneficiary’s death—there is no Medicaid payback requirement.
Can be revocable or irrevocable, depending on the grantor’s preference.

What Is a Pooled Special Needs Trust?

A pooled special needs trust is managed by a nonprofit organization and allows multiple beneficiaries to combine their resources for investment purposes. Each beneficiary has a separate sub-account, but funds are pooled together for management efficiency.

This type of trust is beneficial for those who do not have a suitable family member to act as trustee or who wish to benefit from professional trust management at a lower cost. Pooled trusts also preserve government benefit eligibility.

How Does a Special Needs Trust Protect Government Benefits?

A properly structured special needs trust ensures that a disabled individual maintains eligibility for public assistance programs by preventing direct access to the funds. The trustee manages the trust assets and distributes them for the beneficiary’s benefit in a way that complies with SSI and Medicaid regulations. This prevents an increase in countable income that could disqualify the beneficiary from receiving necessary benefits.

While a special needs trust can cover a broad range of expenses, direct cash payments to the beneficiary should be avoided. Additionally, expenses for food or shelter can be paid by the trust, but this may reduce SSI payments. A knowledgeable trustee will ensure compliance with all rules to maintain the beneficiary’s benefits.

What Are the Responsibilities of a Trustee?

The trustee plays a crucial role in managing the trust and ensuring it meets legal requirements. Their responsibilities include:

Investing and managing trust assets in accordance with the terms of the trust and state law.
Ensuring that funds are spent exclusively for the beneficiary’s needs.
Staying up to date with SSI and Medicaid eligibility rules to avoid jeopardizing benefits.
Keeping detailed records of all trust transactions and expenditures.
Preparing and filing annual reports required by SSI and Medicaid.
Filing state and federal trust tax returns.
Using trust funds to enhance the beneficiary’s quality of life by covering goods and services not provided by government benefits.
Terminating the trust when necessary, such as when the beneficiary no longer qualifies for government benefits or upon the beneficiary’s death.

How Are Funds Used for the Beneficiary?

A special needs trust is designed to cover supplemental expenses that improve the beneficiary’s quality of life without affecting their government benefits. Trustees can use trust funds to purchase:

Personal care attendants
Uncovered medical expenses
Physical therapy
Assistive technology, such as motorized wheelchairs
Recreational activities and vacations
Home furnishings and adaptive modifications
Specially equipped vehicles
Educational courses and training programs

The trustee must ensure that distributions comply with SSI and Medicaid guidelines to prevent any reduction in benefits.

Blue Ash Estate Lawyers at Wolterman Law Office Set Up Special Needs Trusts for Clients

If you have a loved one with a disability, setting up a special needs trust can be a vital part of your estate plan. The experienced Blue Ash special needs trust lawyers at Wolterman Law Office will guide you through the process, ensuring that your loved one’s assets are protected while maintaining eligibility for government benefits. We will help you create a tailored trust that meets your family’s needs. To schedule a free, confidential consultation, call us today at 513-488-1135 or contact us online. Located in Loveland and Blue Ash, Ohio, we serve clients in Hamilton County, Fairfield, Norwood, and Forest Park.