When is a Supplemental Needs Trust Right for Your Family? by the Hills Bank Wealth Management Group
Benefits of A Supplemental Needs Trust A supplemental needs trust is created by a family member, or another individual, for the benefit of a disabled person. The trust provides a financial resource for the disabled person and does not disqualify them from government programs such as Medicaid or Supplemental Security Income (SSI). These programs are “means tested,” meaning that they are only available to those with limited income or assets. They often have extremely low asset limits - for example, an individual receiving SSI cannot have more than $2,000 in countable resources. Any assets left directly to a disabled individual via a traditional inheritance could negatively impact their benefit status. However, if the inheritance is paid to a supplemental needs trust for the individual’s benefit; it will not be includable in their countable resources and will not disqualify them from government programs. These trusts must be 100% discretionary
When preparing their estate plans, many individuals and families are faced with the question of how to provide long-term care for loved ones with physical or developmental disabilities or who require lifelong medical care. They want to ensure that these individuals are financially supported for years after their passing in a way that does not interfere with eligibility for government programs. A supplemental needs trust, also known as a third-party special needs trust, is one of the most common ways for people to accomplish this goal.
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