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An Introduction to Special Needs Trusts | Santa Barbara Estate Planning and Elder Law

Posted by Julianna Malis | Feb 07, 2022 | 0 Comments

For many families with a special needs child, a special needs trust is one of the most important components of the family's overall estate plan. A properly designed and implemented special needs trust can provide a number of important benefits. Santa Barbara Estate Planning can help.

Maximize quality of life while protecting eligibility for government assistance.

A special needs trust allows you to provide funds that can help improve the quality of life for your special needs loved one without jeopardizing eligibility for necessary government assistance, such as Supplemental Security Income (SSI) and Medicaid. Funds in the trust can be used for all of the following and more: 

  • Medical procedures or therapies not available through government assistance
  • Supplemental nursing home care and private companion services
  • Travel expenses
  • Entertainment expenses such as movies, concerts or electronic equipment
  • Fees for guardians and attorneys
  • Other expenses, services or products not provided by a government assistance program

Lower costs for healthcare services.

Medical providers who have contracts with the state to provide Medicaid services generally deliver those services for much less than beneficiaries paying privately. In situations where the special needs trust must reimburse the state for services provided over the beneficiary's lifetime (the payback provision), reimbursement will be for this lower cost and avoid any penalties or interest.

Avoid the stress, expense, and frustration of guardianship.

A properly designed special needs trust can avoid the need for a guardianship proceeding over property issues because trusts are recognized as a less restrictive means to guardianship. This in turn can protect the beneficiary from having to pay for the ongoing costs and formalities of maintaining guardianship.

It is important to note that the various government assistance programs have their own set of rules and that these rules can be extremely complicated. An improperly designed special needs trust could jeopardize your loved one's eligibility for assistance from SSI and Medicaid. In addition, the care requirements of your special needs loved one will change over time, as will the financial situation of your family. For a properly designed special needs trust, you should work with an attorney who has experience in this complicated area of the law. SB Estate Planning is well versed in setting up Special Needs Trusts (SNTs), and we would be glad to consult with you on what options might be best for you and your family. Please give us a call at (805)946-1550 or visit our website to set up a consultation.

About the Author

Julianna Malis

Julianna Malis, Attorney at Law, LL.M (Taxation-Estate Planning) Julianna helps families stop worrying about the ‘what ifs’ in life, and instead prepare for life events through proper estate planning. As the founder of Santa Barbara Estate Planning Law Group, she brings a family-centered approach to planning, with a focus on practical solutions for families and high net worth individuals...

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