Special needs planning is a specialized area of the law that focuses on protecting public benefits for people with special needs, while at the same time facilitating a higher quality of life. A special needs plan can provide a framework for proper medical care and management of assets as well as protect assets from creditors and predators. One of the key components of any special needs plan is a Special Needs Trust.
The two most common types of Special Needs Trusts in Florida are First Party Trusts and Third Party Trusts.
First Party Special Needs Trusts must be set up by a parent, grandparent, legal guardian, or the Court, for the sole benefit of a person with special needs. The Trust must be established with money owned by the person with a disability. First Party Special Needs Trusts are subject to the payback provision, which means that when the beneficiary dies, the trustee must use any remaining trust assets to repay the State of Florida for all benefits provided by the state to the special needs beneficiary.
Third Party Special Needs Trusts are funded with assets of someone other than the beneficiary. They are the most common and effective way for parents to provide for a child with a disability, and they are not subject to the payback provision. Typically, Third Party Trusts are established through a Revocable Living Trust or as a Stand-Alone Trust. It can also be established through a Will.
Benefits of a Third Party Trust include:
- No requirement that the State of Florida be paid back
- Trust provisions can be flexible and drafted in accordance with your wishes and desires for the beneficiary, within the guidelines allowed by law
- Trustees and successors know what to expect and can prepare/train accordingly
- If laws change, the trust can be amended
- Ensures that trust assets stay in the family
- Can include special provisions such as a Care Manager and Advisory Committee, and specific types of distributions and authorization for the trust to be terminated if the beneficiary is no longer disabled or in need of government benefits
Improved Quality Of Life
A Special Needs Trust gives the beneficiary indirect access to a fund that can provide for his or her supplemental needs. This can dramatically improve the beneficiary’s quality of life by providing for:
- Housing (although this may cause a reduction in benefits)
- Food (distributions for food may also cause a reduction in benefits)
- Household furnishings
- Educational expenses
- Musical instruments
- Medical procedures or therapies not available through government assistance
- Medications not covered by benefits
- Supplemental nursing home care and private companion services
- Geriatric care services
- Travel expenses
- Entertainment expenses such as movies, concerts or electronic equipment
- An automobile
- Attorney fees
- Other expenses, services or products not provided by a government assistance program
Additional benefits of a Special Needs Trust include:
Freedom Of Choice
The beneficiary can use his or her Medicaid benefits and trust distributions to pay for medical services not provided by Medicaid, or for a specialist who does not accept Medicaid payments.
Contact us today to learn how we can assist you in protecting your special needs loved one’s eligibility for government assistance and improving his or her quality of life.