BETTEN, MURPHY & WEISS
Brevard's Elder Law Firm
Supplemental needs trusts (SNTs, also known as special needs trusts or supplemental care trusts) are trusts, created for disabled individuals, which are intended to supplement but not replace any public benefits to which the disabled individual may be entitled.
Goals: The goal of funding a supplemental needs trust is to provide a pool of funds from which the disabled individual can increase the quality of his or her life, while still remaining eligible for public assistance.
Caveat: The regulations regarding SNTs, SSI, Medicaid, federal housing, and other programs are creatures of federal and state statute and are subject to change. The protections provided by a SNT may change throughout the beneficiary's lifetime and cannot be guaranteed.
Supplemental needs trusts which are established in accordance with the regulations found under '1396p(d)(4)(a) were provided for under OBRA '93 and created additional protections for disabled individuals, including protection from certain asset and transfer rules. A (d)(4)(a) trust must be established by a parent, grandparent, legal guardian or court, and must provide that after the death of the beneficiary, the state be repaid from the assets remaining in the trust up to the amount equal to the medical benefits paid on behalf of the beneficiary.
Usually, the public benefits which the recipients are trying to preserve are SSI (Supplemental Security Income) and Medicaid. In most states, persons eligible for SSI are automatically eligible for Medicaid. The Medicaid program pays for medical assistance that disabled individuals often need during their lifetimes. Sometimes, preservation of housing and additional benefits is also a consideration.
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