A trust is a legal arrangement in which a person manages the beneficiaries assets. This means you can establish a trust for your special needs family member to help manage their finances. This can be done as a way to help your loved one now instead of waiting until you are gone. As with anything, there are limitations. So what can a special needs trust pay for?
Many people who are physically or mentally disabled receive government help in the form of Medicaid or Supplemental Security Income (SSI). Both of these benefits are needs-based, meaning if the person has too much money, they can lose their benefits. This is why it is not a good idea to leave money for your loved one in your will or give them large sums of money as a gift. Instead, the better way is to establish a special needs trust.
An experienced estate planning attorney can help you establish a special needs trust. This is a way to ensure your disabled family member has the money they need to live comfortably. The funds given by SSI or Medicaid are often quite low and may only cover the person’s basic necessities. A trust is a way you can help them lead independent lives and not have to worry about their checking account.
As with anything, there are limitations to a special needs trust. Unfortunately, the money must be used in accordance with the laws that govern trust accounts. But here are some things a special needs trust can pay for:
As you can see, the special needs trust can give these things that will help your loved one in life. But the money from the federal benefits must be used when paying for the following – and the special needs trust cannot pay for:
The trustee must be careful when managing the special needs trust. Your estate planning attorney can help you establish the trust and understand its requirements.
Do you have questions about setting up a special needs trust in Illinois? Contact us today at the Estate & Probate Legal Group at 630-864-5835. Our experienced attorneys understand applicable laws and can advise you on the best options to protect your loved ones.
Areas we serve: Cook, DuPage, Kane, Lake and Will counties.