A special needs trust (SNT) is a powerful legal tool designed to benefit individuals with disabilities by preserving their eligibility for government assistance programs like Medicaid and SSI while ensuring they have access to additional resources. But can you create a special needs trust for yourself? The answer depends on the type of trust and your situation.
Setting up a special needs trust for yourself, often referred to as a first-party or self-settled SNT, is indeed possible. This type of trust allows individuals with disabilities to place their own assets into the trust. The primary advantage of a first-party SNT is that it enables you to maintain eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). Without such a trust, holding significant assets could disqualify you from receiving these benefits.
A first-party special needs trust must be established under specific conditions. It must be created by you, your parent, grandparent, legal guardian, or a court. Importantly, the trust must be irrevocable, meaning once assets are placed into the trust, they cannot be removed.
To establish a first-party special needs trust, you must meet certain eligibility criteria. You must be considered disabled under Social Security Administration guidelines, and the trust must be set up before you turn 65. Additionally, any assets placed in the trust must come from your own funds; the trust must provide that Medicaid will be reimbursed from the funds remaining in the trust at your death or termination of the trust, whichever occurs first; and you must be the sole beneficiary of the trust.
The benefits of a special needs trust are significant. The trust can pay for expenses not covered by government benefits, such as medical treatments, therapies, education, personal care and give you access to essential public benefits.
If you are an individual with a disability, setting up a special needs trust for yourself can be an effective strategy to protect your assets and maintain eligibility for government benefits. Contact our attorneys at Grissom Law, LLC today, we can help you determine if a first-party special needs trust is the right solution for you and guide you through each step of the process.
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