A special needs trust can be a great way to provide for a loved one while still ensuring that he or she qualifies for government programs like Medicaid. This is because assets that are passed down to your loved one through a special needs trust are exempt from income considerations, meaning that they won’t count against your loved one when determining governmental program eligibility.
But what can special needs trust assets be used for?
This is a good question, and one that comes up all the time. After all, many estate planners are concerned that the restrictions on the use of special needs trust assets will be too restrictive, so they wonder if just leaving a bulk sum of money is the better option. It’s oftentimes not. A special needs trust gives you and your loved one a lot of leeway on how assets are used. In fact, assets from a special needs trust can be used to pay for any of the following:
- A primary residence
- Clothing
- One vehicle
- Home furnishings
- Medical care that falls outside of that provided by government programs
- Special medical equipment
- Personal effects
- Job coaching
- Internet services
- Some forms of entertainment
As you can see, the use of special needs trust assets can be quite extensive, ensuring that your loved one has the fullest support possible under the law.
Navigating your estate plan and special needs trusts
Keep in mind, though, that there are legal requirements that have to be met in order for a special needs trust to be legally valid. That’s why you want to be careful that you don’t make any missteps during the estate planning process. To reduce the risk of doing so, you may want to discuss what you want out of your estate plan with an attorney who is well-versed in this area of the law.