May is National Elder Law Month and Agnes Ptasznik, attorney in Chuhak & Tecson, P.C.’s Estate Planning & Asset Protection practice, explains what a special needs trust is and why it matters to you and your family.

May is National Elder Law Month and understanding a special needs trust may be of interest not only to seniors and their families, but to many others as well,  including parents, caregivers and anyone planning for a loved one with a disability. This is a brief explanation of what a special needs trust is and why it matters.

A special needs trust is designed for a beneficiary with a disability who may be receiving needs-based public benefits, such as Medicaid or Supplemental Security Income. These programs are often critical to providing medical care and basic support, but they also come with strict financial limits.

That means if the individual receives assets outright — whether through an inheritance, a personal injury settlement or even a well-intended gift — it can unintentionally disqualify them from those important benefits. In some cases, even a modest amount of money can create a serious issue.

A properly drafted special needs trust solves this problem by allowing assets to be held and managed for the beneficiary’s benefit, while preserving the eligibility for public programs. The funds in a special needs trust can be used to enhance the person’s quality of life, including things like therapies, education, transportation, entertainment, travel or personal care needs that are not covered by government benefits.

There are different types of special needs trusts and the right structure depends on factors such as where the funds are coming from, who is creating the trust and the beneficiary’s individual circumstances. Because the rules are very technical, careful planning is essential.

If this applies to your family, it’s important to speak with an estate planning or elder law attorney to make sure your plan is structured correctly and truly protects the benefits your loved one relies on.

Client alert authored by Agnes A. Ptasznik (312 849 4139), associate.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.