Special Needs Trusts are a very specialized estate planning tool and should only be created by attorneys experienced in this area of law. But, as a Virginia special needs planning lawyer, I know that even if the Special Needs Trust was set up properly, there can still be confusion about what it can be used to pay for.
A Special Needs Trust is created to protect eligibility for Supplemental Security Income (SSI), Medicaid and other public benefits programs. If you have questions or concerns as to how to use a previously drafted Special Needs Trust it is best to consult with an experienced Special Needs Planning lawyer, but below you will find a few questions that Trustees should ask themselves before they make payment from the Trust.
- Is the expenditure permitted by the wording in the Special Needs Trust itself? Is it allowed by Medicaid or Social Security regulations?
- Does the expenditure clearly benefit the beneficiary of the trust? Be careful about the expenditures that also benefit other family members.
- Will the funds used by the expenditure leave enough money in the Special Needs Trust? Is it a large payment, such as the purchase of a car, which reduces the future benefits to the beneficiary?
- Are there other sources of funds available for the expenditure? If public benefits are available to provide the same items, the money should probably not come from the trust. Were family resources available for the expenditure? In that case it might be better to save trust funds – especially if the beneficiary is a minor since parents have a general obligation of support.
If you have any doubt about whether an expenditure from the funds of a Special Needs Trust is prohibited, it is best to consult with a qualified Special Needs Planning attorney in Virginia. If you have questions, feel free to call our office at (571) 328-5795.