A Supplemental Needs Trust is established for the benefit of a person with special needs as long as the Beneficiary is not over the age of 65. and residing in long-term care without a reasonable expectation of discharge. Use of a Supplemental Needs Trust allows the Beneficiaries, to retain their government assistance and also have funds available for opportunities like advanced medical treatments, education, and leisure activities. The objective behind establishing a Supplemental Needs Trust is similar to that of a Special Needs Trust, which the subject of a previous blog article.
The trust’s “Grantor,” which is the title given to the person who establishes the Supplemental Needs Trust, may be a parent, grandparent, actually anyone other than the Beneficiary or the Beneficiary’s spouse. Similarly, funds in the trust may come from anyone other than the Beneficiary or the Beneficiary’s spouse. Grantors typically establish the Supplemental Needs Trust with their own assets through a Will or through a “stand-alone” Supplemental Needs Trust. In doing so, the Grantor may appoint herself or another person as the Trustee, who has the responsibility to disburse funds to pay for expenses of the Beneficiary not covered by government assistance. Funds from the trust are not allowed to be disbursed directly to the Beneficiary. Disbursements from the Supplemental Needs Trust can be made only to the person or entity providing the goods or services to the Beneficiary. When the Beneficiary passes away, the funds or assets in the trust are not subject to claim by the government; it is disbursed according to the terms of the trust agreement; i.e., to family members, friends, non-profits, or whomever the Grantor designates.
The information in this article just is a short overview of what there is to know about Supplemental Needs Trusts. The best way to learn more about a Supplemental Needs Trust offers is to schedule a consultation with an attorney in your state who specializes in this area of practice.