Is a Special Needs Trust Appropriate?
Those who qualify for government disability benefits quickly discover that the benefits cover bare basics but not enough to live a comfortable life. Many well-intentioned family members believe that disinheriting a disabled family member will protect the ability to qualify for benefits, but this often leaves their intended share in the hands of another family member, raising other legal, financial, and practical ramifications. A special needs trust often solves these problems.
Under New York law, an SNT may be set for the benefit of a person with a severe and chronic or persistent disability. Often SNTs are set up by parents or grandparents, but it is possible for the disabled person to set up an SNT for their own benefit. A critical part of setting up the trust involves choosing a trustee who will responsibly handle the accounts.
The assets in an SNT may be used for large or small expenses, from purchasing a home for the beneficiary to live in to paying for recreational activities to enrich their lives. However, certain types of SNTs must include a payback provision directing the trust to pay back certain government benefits upon the beneficiary’s death. Talk to a special needs will planning attorney to find out which type would be the most appropriate for your situation.