A Special Needs Trust for a Dayton or Ohio resident with special care needs is an excellent way to ensure that person’s needs continue to be met for the rest of their life. A Special Needs Trust (SNT) is designed to accomplish two important goals:
Any money a special needs person receives can potentially reduce Supplemental Security Income or cause a total loss of Medicaid benefits. By placing the person’s money and assets in a trust account, they remain eligible for government health care programs while still having some access to those funds and assets.
An SNT can also ensure that the money won’t be wasted or spent too quickly because restrictions are placed on how the money is spent.
Understanding Differences in Special Needs Trusts — Dayton Lawyer Explains
Essentially there are two kinds of Special Needs Trusts. First-Party SNT’s are funded by the assets of the special needs person. Third-Party SNT’s are funded by other people, usually parents and grandparents.
Another major difference is that First-Party SNT’s are not protected from government payback claims. If the beneficiary of a First-Party SNT dies, the government can claim any remaining funds/assets in the SNT to reimburse the cost of the person’s Medicaid benefits. Usually this leaves no funds or assets in the trust account to pass on to heirs.
However, the government usually cannot claim funds from a Third-Party SNT because of the spendthrift protections that are usually put in place. When the beneficiary of a Third-Party SNT dies, funds remaining in the trust account can be passed on to heirs. Spendthrift protections can also regulate how the beneficiary spends the funds and at what rate to ensure the trust can meet their needs for many years to come.
If you want to set aside funds for a family member with special needs without threatening their Medicaid eligibility, you’ll need a Third-Party Special Needs Trust. If you are looking to protect money or assets that a special needs person has received, such as an inheritance or insurance settlement, you’ll need a First-Party Special Needs Trust. In Dayton and Ohio an estate planning lawyer can help you set up a trust account to fit your circumstances.
For more about setting up a Special Needs Trust in Dayton or Ohio, please visit our Free Resources page.