Understanding Special Needs Trusts in New York
Special Needs Trusts, also known as Supplemental Needs Trusts, are crucial legal tools designed to provide for individuals with disabilities without jeopardizing their eligibility for essential government benefits. These trusts play a vital role in safeguarding the financial well-being and quality of life of individuals who may require ongoing care and support.
What Is a Special Needs Trust?
A Special Needs Trust is a legal arrangement established to hold and manage assets for the benefit of a person with a disability. The primary goal of this trust is to enhance the quality of life for the individual by providing for their supplemental needs, which are not covered by government benefits like Medicaid or Supplemental Security Income (SSI).
Types of Special Needs Trusts
There are two main types of Special Needs Trusts:
1. Third-Party Special Needs Trust
This trust is funded with assets that do not belong to the individual with a disability. Instead, it is typically set up by a parent, grandparent, or other family member. A Third-Party Special Needs Trust ensures that the beneficiary can access additional resources while qualifying for government benefits.
2. First-Party or Self-Settled Special Needs Trust
This trust is funded with the assets of the individual with a disability, often as a result of an inheritance, personal injury settlement, or other sources. It allows the person to retain their eligibility for government benefits while still having a fund to cover supplemental needs.
Key Benefits of a Special Needs Trust
By establishing a Special Needs Trust, families can achieve several essential objectives:
Preservation of Eligibility
Assets held in a Special Needs Trust are not counted towards the beneficiary’s eligibility for means-tested government programs like Medicaid and SSI.
Enhanced Quality of Life
The trust funds can be used to pay for a wide range of goods and services that improve the beneficiary’s overall well-being, such as education, recreation, medical expenses not covered by benefits, and more.
A trustee, typically a trusted family member or a professional trustee, is appointed to manage the trust assets and make distributions in accordance with the trust’s terms and the beneficiary’s needs.
Protection from Creditors
The assets in a Special Needs Trust are generally protected from the beneficiary’s creditors, providing an added layer of financial security.
Working with Experienced Special Needs Trust Attorneys
Establishing a Special Needs Trust requires careful planning and expertise in both disability law and estate planning. The attorneys at Morgan Legal Group in New York City have a deep understanding of the legal intricacies involved and are dedicated to helping families create trusts that ensure the long-term financial security and well-being of their loved ones with disabilities.
If you have questions about Special Needs Trusts or want to discuss how one could benefit your family, contact us at Morgan Legal Group. Our experienced attorneys are here to provide the guidance and support you need.