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Factors to consider when setting up a special needs trust

If you take care of someone with special needs, then it's important for you to start thinking about how you'd like him or her to be taken care of in the future if something were to happen to you. It's particularly important that if he or she either plans to or is already receiving government benefits, that a special needs trust (SNT) be set up to ensure that can happen.

Most any parents, grandparents or legal guardians of any disabled individual that's under the age of 65 is eligible to set a SNT for their loved one. To do so, you'll need to pool any and all assets the disabled individual may have and be willing to set them aside explicitly for the use of that person.

Under the Omnibus Budget Reconciliation Act of 1993, any money put into an SNT cannot impact an individual's ability to either qualify for or continue receiving Medicaid benefits.

So long as the SNT is set up before an individual's 65th birthday, it will continue to be exempt, even after the recipient ages beyond this point. Medicaid penalty payments may be assessed on any assets that an individual may take possession of after this age.

When the beneficiary of the SNT dies, any assets remaining in the trust are required to be paid back to the state at a rate equivalent to all Medicaid benefits that were received by the deceased individual. This is authorized under the trust's payback provision.

It's only after the state has been reimbursed its Medicaid benefits that the assets remaining in a SNT are finally released to family members and other heirs as part of the probate process.

If you care for someone with special needs and would like to ensure that their interests are protected if you can't do so yourself, then a Queens attorney can advise you of options available to you to do so.

Source: Disability Resource Center, "When a special needs trust is not the only or best choice," Stephen Hodson, accessed March 23, 2018

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