SPECIAL NEEDS TRUST
Family With a Special Needs Person
Do you have a family member with special needs? It could be your autistic child or your father with Alzheimer. If you are in this situation, you probably worry about how that loved one will be cared for when you are no longer there to take care of them. Special needs requires special planning. Usually this special planning requires a special needs trust to provide the financial support for your loved one, while not losing much needed government benefits.
Special Needs Trust
Special needs require money, lots of money. You want to provide for your loved one money to provide his or quality of life, but you fear the loss of government benefits such as Medicaid. In Oregon you can you can provide for that special needs person through a Special Needs Trust or under certain conditions by making contributions under the ABLE Act. If you special needs person receives government needs based benefits, then to remain eligible assets for supplemental items must not be counted as available assets. A special needs trust satisfies this goal.
Not every disabled person needs a special needs trust. However, for those receiving means tested benefits such as Supplemental Security Income, Medicaid, federal housing assistance programs, and supplemental nutrition assistance a special needs trust may be necessary.
Do You Have to Pay Back Benefits Received by the Special Needs Person?
There are two general types of Special Needs Trusts:
- Third Party Trust; and
- First Party Payback Trust.
Third Party Trust
A third party trust is a trust that is funded by anyone other than the special needs person. The money left in a third party trust are not paid back for benefits received to the government. When the third party trust terminates, any remaining funds are transferred per the provisions of the trust.
A third party trust can be established in a Will or Trust and upon the death of a person, the special needs trust is funded. A Will may provide for direct inheritances to two non-special needs child, but the third special needs child receives his or her inheritance in the special needs trust. Alternatively, a special needs trust can be established and funded during the third person’s lifetime, but can also receive additional assets after the death of the third person. This allows friends and relatives to make lifetime gifts to the special needs trust at any time. Any distributions allowed from the special needs trust are limited to preserve government benefits.
First Party Payback Trust
A First Party Payback Trust is funded with the special needs person’s own funds. Even though funded with the person’s own funds, assets in the First Party Payback Trust are not considered available assets in determining Medicaid eligibility. Certain requirements are necessary to maintain Medicaid eligibility:
- The trust must be for the benefit of the special needs person;
- The trust must be created and funded while the individual is under the age of 65;
- The trust must contain the special needs person’s own assets;
- The trust must be created by a parent, grandparent, legal guardian or conservator; and
- They must provide that any State that has provide Medicaid benefits will receive a payback of those benefits upon the person’s death.
To create a first party payback trust the Probate Court is often involved. For example if the special needs person is a minor or there is a need for a guardian or conservator, the Court will be involved. It sometimes occurs that a Court is requested to create the trust and appoint a trustee.
Oregon Special Needs Trust Attorney Comes to You
I know how busy you can be with your work and daily routine. If you have a special needs person your life is even more busy. Further, it is often difficult to travel. To make it easier for you to create a plan for you and your special needs person I come to your home, office, or other location. Further, upon request I will make evening and week-end appointments.
Call Now for a Free Consultation to Discuss Your Options for a Special Needs Person
If you have a special needs person, I know you have lots of questions. The law in this area is constantly changing, and each year brings new regulations and requirements. If you would like to discuss special needs planning, including options other than special needs trusts, give me a call, Russ Pike, at 503.888.0952.