A Special Needs Trust is an important legal tool that holds assets for a person with special needs. By keeping assets separate in a Special Needs Trust, the funds will not affect the person’s eligibility for public benefits, such as Medicaid and Supplemental Security Income (SSI). In the end, the person with special needs will have money set aside for his or her future care, while keeping key benefits necessary for healthcare and other daily expenses intact.
However, there are rules about what the funds inside a Special Needs Trust can and cannot be used for. For example, a beneficiary of a Special Needs Trust should never be given cash out of the trust. Using the trust for food and housing expenses should also be discussed in advance with a Special Needs Planning lawyer, as it could cause a reduction in public benefits.
What a Special Needs Trust is really meant to cover are the “extras” that would be used to supplement the disabled individual’s lifestyle. This might include expenses such as recreation, education, travel and therapy.
What About Expensive Equipment and Mobility Devices?
We are often asked by parents whether the funds in a Special Needs Trust can be used to pay for more expensive “lifestyle” purchases, such as a custom power wheelchair, electronics such as iPads for learning or communication purposes, or even an accessible van for personal transportation.
The great thing about a Special Needs Trust is that there is no “cap” or price limit on what can be spent on an allowable purchase.
If the child needs specialty equipment to get around, say for example a $50,000 wheelchair-accessible van, the trust can be used to make such payments, provided there are sufficient assets in the trust for such a purchase.
When In Doubt, Check with a Virginia Special Needs Planning Lawyer
Managing a Special Needs Trust is a big responsibility and a parent or trustee may have reservations before using the trust to buy a “big ticket item.” If you are worried about your purchase, don’t be afraid to reach out to a special needs planning attorney for guidance.
If you need assistance, simply call our law firm at (571) 328-5795 to set up an appointment.