Many Florida residents have family members who are disabled. If you are one of them, you might want to consider creating a special needs trust for your loved one.
What is a special needs trust?
A special needs trust is a legal arrangement that allows a person with physical or mental disabilities or who is chronically ill to gain an income while allowing them to continue receiving public assistance. With a special needs trust, the person can still get health insurance coverage through Medicaid or Medicare and receive Social Security benefits. There is also a fiduciary relationship involved as a person or entity can manage the assets of the person who benefits from the trust.
Special needs trusts are only valid when a person has limited finances and needs to be on public assistance. If the person earns too much money, they might not qualify.
How does a special needs trust work?
The purpose of a special needs trust is to add to the person’s financial needs not covered by public assistance. When there are assets held by the trust, those assets are not counted toward the individual’s ability to qualify for public assistance unless they’re used for shelter or some food expenses. In most cases, the funds from a special needs trust go toward the person’s medical and transportation expenses, caretakers’ pay and certain other expenses.
When a person creates a special needs trust for someone, they choose a trustee who oversees the trust and ensures that the funds go to the right place.
What are the benefits of a special needs trust?
The person for whom the special needs trust is created can benefit in certain ways. The trust can help cover certain costs without compromising their ability to continue receiving the public assistance they need. The funds put into the trust are spent as intended and cannot be used for any other purpose. The person is also protected against financial abuse.
If you have a loved one who needs a special needs trust, you should look into your options.