People who cannot work due to a physical or mental health condition typically receive public benefits like Medicaid, housing assistance, vocational assistance, and other supports. These benefits are often means-tested, meaning that anyone whose income or assets exceed a specified threshold is not eligible.
Parents, grandparents, siblings, and adult children often worry about how to provide for a loved one with a disability without impairing their eligibility for public benefits. A supplemental needs trust—sometimes called a special needs trust—is often the answer.
Creating a supplemental needs trust in Virginia Beach requires the assistance of an attorney experienced in elder law, estate planning, and special needs planning. The lawyers at Parks Zeigler, PLLC have the knowledge to ensure your loved one is protected.
How a Supplemental Needs Trust Works
A trust is a way to transfer ownership of property to a legal entity managed by a trustee for a beneficiary. Once the creator of the trust, called the grantor, moves property into it, the trust owns the property.
A supplemental needs trust allows a person in Virginia Beach who requires long-term care to meet the Medicaid eligibility requirements without having to impoverish themselves.
First-Person and Third-Person Trusts
Many supplemental needs trusts are third-person trusts, meaning someone—often a parent or spouse—funds the trust for a relative with a disability. The grantor often serves as trustee for the beneficiary and names a co-trustee or successor trustee to take over when the grantor dies or becomes incapacitated. Sometimes the grantor immediately hands control of the trust over to a trustee.
Sometimes the person in Virginia Beach with the disability has their own money and wishes to establish a supplemental needs trust for themselves. These are called first-person trusts because the beneficiary funded the trust with their own money. First-person supplemental needs trusts often manage the money a disabled person receives from a personal injury or medical malpractice lawsuit. Inheritances and other property also could fund a first-person supplemental needs trust.
How the Trustee Can Use the Money in the Trust
Expenditures from the supplemental needs trust depend largely on which programs might provide services to the beneficiary. These trusts are almost always designed to preserve eligibility for Medicaid and Social Security Supplemental Income, but there might be state programs with specific rules. It is important to work with a Virginia Beach attorney who is familiar with the special trust programs that might be available to the beneficiary.
The document establishing the trust will describe its purpose, and any expenditures from the trust must serve that stated purpose. In general, the purpose of a supplemental needs trust is to provide a better quality of life for the beneficiary while preserving their eligibility for benefits. If an expenditure benefits others besides the beneficiary, it is wise to consider using other funds for the purpose rather than trust funds, which should benefit only the beneficiary.
The trustee determines how to spend the money in a supplemental needs trust and in general, they cannot spend trust money on housing or food. Appropriate uses for money from the trust could include haircuts, internet service, education, travel, recreational activities, and similar expenditures. Special needs trust money could also be used to upgrade things that public benefits buy—for example, stylish eyeglass frames rather than the basic frames Medicaid covers, or an electronic wheelchair instead of a manually powered one.
Consult a Virginia Beach Attorney About Establishing a Special Needs Trust
Long-term care can be extremely expensive. Almost all families must turn to the Medicaid program when a loved one needs long-term care, but even moderate-income families may have too much wealth to qualify.
A supplemental needs trust in Virginia Beach allows a person who needs care to qualify for the Medicaid program but provides them with money that can improve their quality of life. Speak with a skilled attorney at Parks Zeigler, PLLC about establishing a supplemental needs trust today.
