When you have a loved one who is unable to take care of himself or herself, you have the unique responsibility to provide appropriate care. Though there are some government assistance programs, sometimes that is not enough.
In many cases, a special needs trust may be beneficial. There are a few important things to know that can help you protect your loved one with this type of trust.
The government provides certain benefits for people with special needs, including Supplemental Security Income, Medicaid and subsidized housing. However, in order to qualify for these benefits, the government looks at several different factors. One of the main factors is financial circumstances, and this restricts the level of assets that recipients may have. Therefore, some parties may qualify in other areas, but if they have a high level of assets in their name, they may not qualify for the assistance they need.
Benefit of a trust
Though there are a variety of trusts that may appeal to different types of people, they all serve the same purpose. In general, a trust holds and protects assets for a particular party. In the case of a special needs trust, it circumvents the usual restrictions to allow the person with special needs to receive governmental assistance while still maintaining assets via the trust.
To set up a special needs trust, it must meet certain requirements, including:
- The beneficiary is disabled under Social Security standards
- The beneficiary is less than 65 years old
- The trust is irrevocable and its own separate entity with a Federal Identification Number
Along with these requirements, the trust must also fulfill all the stipulations of Michigan’s trust code. It is critical that petitioning parties meet these requirements, so it is a good idea to review the official regulations in full.
These facts provide a background for special needs trust. In order to make an informed decision, take some time to research the law in full and your available options.