Planning For Special Needs Trusts In Florida

For most people, qualifying for Medicaid and SSI can be painstaking and complex, as these “means-tested” programs require an individual to fall below a certain income threshold. These income standards are very low. Anything over essentially poverty-level income can disqualify a person from receiving critical Medicaid or SSI benefits that cover healthcare expenses and basic living costs.

Whether someone is trying to qualify for Medicaid or SSI benefits or simply trying to maintain them, new problems can arise when the individual receives a cash gift from a family member or any financial windfall such as an inheritance or legal settlement. These types of financial distributions, while not “earned” by the recipient, are still counted as income for program eligibility purposes.

Based on how these payouts are calculated, a well-intended inheritance bestowed through a will can cause serious problems for a beneficiary dependent on Medicaid to cover their nursing home costs. Other examples may include a disabled beneficiary who receives funds from a personal injury settlement or a disabled person whose family member named them as a beneficiary in a trust.

What is a Special Needs Trust in Florida?

Fortunately, individuals and families can prepare for these possibilities through a Special Needs Trust. A Special Needs Trust (or “SNT”) is a trust that preserves the beneficiary’s eligibility for needs-based government benefits such as Medicaid and SSI. These trusts are a simple but crucial way to provide a better quality of life for seniors and people with disabilities without disrupting their ability to receive government benefits. Assets held by a Florida Special Needs Trust are not counted for purposes of Medicaid eligibility in Florida.

Since the beneficiary does not own the assets in the trust, they can remain eligible for asset-limited benefit programs while receiving payments through the SNT. Funds from the SNT can cover costs and expenses generally not covered by Medicaid or SSI, such as:

• Personal grooming and care
• Clothing and dry cleaning
• Transportation and rideshare programs
• Hobbies
• Entertainment
• Electronic equipment, Computers, TVs
• Education and job training
• Housekeeping and cooking assistance
• Some medical services, therapies, and equipment.

In addition to covering expenses, Special Needs Trusts can also shield an individual’s assets from creditors or fraudsters that frequently prey on seniors and people with disabilities.

A special needs trust can be a first-party SNT, known as a “self-settled” trust, which is created by the individual receiving the proceeds from the trust itself. Or it can be a third-party SNT, created by a parent, grandparent, sibling, or other family member.

Once a Special Needs Trust is established, and funds are disbursed, how the individual or their caretaker uses those funds is also critical. SNT funds can supplement but not supplant benefits used to cover basic food and housing costs for which Medicaid and SSI are intended.

Should I Discuss Special Needs Trusts With an Attorney?

Special Needs Trusts are relatively straightforward legal devices for those expecting to receive funds that might otherwise disrupt their Medicaid and SSI eligibility. However, every family’s situation is different, and you will want to discuss your full range of options with a qualified legal professional that will put you in the best position for the future. Our attorneys can review your personal and financial circumstances and help set up a trust that safeguards you or your loved one.

Our Tampa Estate Planning Attorneys at Strategic Counsel Law Group Can Help You Establish a Special Needs Trust

When you or a family member live on limited means due to age or disability, the last thing you want is an unwelcome surprise when an inheritance or settlement comes through. The experienced Tampa estate planning attorneys at Strategic Counsel Law Group can review all options with you and create a Special Needs Trust that is custom tailored to your situation. Call our attorneys at 813-286-1700 or schedule a consultation online today to discuss your needs and goals through a Special Needs Trust.

Resource:

secure.ssa.gov/poms.nsf/lnx/0501120203