What is a Special Needs Trust?

continued from page 1

First, it is important not to duplicate services available through government programs, but the trustee should be authorized to weigh the comparative quality of what is available. For instance, many physicians will not accept Medicaid. In addition, Medicaid might only pay for a stainless steel tooth cap and not a porcelain one. Thus, the trustee must be allowed to spend money on quality medical and dental care. The trust should be explicit on this point.

The trustee should be allowed to pay for vacations, day trips and the like with or without the company of a friend or companion. But equally important, the trustee should be authorized to pay for costs incurred by others when visiting or handling the affairs of the person with a disability. We do not want a spouse on the West Coast complaining that his wife is dipping into personal savings to pay for a trip to visit her disabled brother in the East. Similarly, the trust can pay for people to monitor the care provided to a person with a disability. In other words, a family member can hire someone or an organization to be his/her eyes and ears.

The trustee should have the option of purchasing real estate in which the person with a disability will live. (Obviously, in some cases, the disabilities are too profound for that to be feasible.) The trust must provide that the person with a disability will be charged rent. In one case, HUD paid rent to a trust to offset the rental costs incurred by the person with a disability. Also, the trust should have the flexibility to pay for modifications to the home of a family member with whom the person with a disability might live.

For some people, an automobile might be important. The trust should have the capacity to pay for transportation (but never own a vehicle), and equally important, to pay for the insurance and maintenance of the vehicle.

return to page 1

Read our FAQs on trusts