A special needs trust is also called a supplemental needs trust and is a trust that provides for the supplemental needs of a disabled individual who will qualify for needs-based public assistance such as Supplemental Security Income (SSI) or Medicaid. A special needs trust can be a living trust or a testamentary trust. Special needs trusts must contain specific language to be considered a special needs trust for purposes of the Medicaid and SSI benefit programs. An estate planning attorney can assist with drafting a special needs trust using the required terms.
A person making a Will who wants to name a beneficiary currently receiving SSI or Medicaid may, instead, want to consider creating a special needs trust for that beneficiary. An individual who has plans to apply for SSI or Medicaid and anticipates receiving an inheritance or other large financial windfall may, instead, want to consider using a special needs trust.
A person making a special needs trust can choose a trustee of the trust. A trustee is responsible for carrying out the terms of the trust. A trustee is considered a fiduciary. A trustee has many fiduciary duties and may be held personally liable for violating his or her fiduciary duties by not administering the trust in accordance with trust terms. A trustee of a special needs trust has the additional responsibility of making sure a distribution from the trust does not cause the trust beneficiary to lose his or her SSI or Medicaid benefits. There are many non-profit organizations and corporate organizations, including banks, who are willing to serve as trustee of a special needs trust. These organizations have knowledge about how to make trust distributions that can help the beneficiary while also maintaining the trust beneficiary’s eligibility to received SSI or Medicaid benefits.
Thus, it is important when making a special needs trust to consult with an estate planning attorney about who should serve as the trustee of a special needs trust, the terms of the special needs trust, and the duties of the trustee of a special needs trust.
An estate planning attorney with Law Office of Adriane S. Grace, PLLC can assist you with determining whether a special needs trust is advisable and can assist with drafting a special needs trust under Texas trust law.
