Appropriate uses for Special Needs Trust Funds

By March 15, 2010Uncategorized

A substantial number of people in need of long-term health care have too many assets to qualify for ALTCS, but not enough to cover the future costs of expensive medical treatment.  Faced with this dilemma, many individuals mistakenly believe that their only option is to become destitute by spending all of their savings on health care before later applying for the ALTCS benefits.  While this is indeed one option, it is clearly not one that is attractive.  A better alternative involves creating a special needs trust. 

Special needs trusts provide a way for people to retain their savings, while at the same time remaining eligible for public benefits.  Assets in a special needs trust are not counted when determining eligibility for AHCCCS medical insurance, ALTCS long-term health care coverage, or SSI cash benefits.  As such, applicants who would not otherwise be eligible to receive these public benefits may be able to qualify after creating a special needs trust.

The purpose of a special needs trust is to supplement the assistance provided by the public benefits that the individual is receiving.  As such, once assets are placed into the special needs trust, the trust assets can only be used for allowable expenses.  Trust assets used for impermissible expenses can be counted as income, causing the individual to be disqualified from public benefits.  Special needs trust funds can be spent on the following types of expenses:

  • Home maintenance or repair.
  • School tuition and books.
  • Appropriate entertainment expenses.
  • Supplemental caregiver services.
  • Trust management expenses.
  • Prepaid burial plans.
  • Medical services not covered by public benefits.
  • Personal care.
  • Clothing.

A special needs trust provides a means for recipients of public benefits to improve their quality of life.  By placing assets in a special needs trust to be used for their supplemental needs, individuals can ensure that their care and comfort are attended to, while remaining eligible for the public benefits they require.  For a consultation with an attorney at JacksonWhite, please call (480) 464-1111 and ask speak to someone in the Elder Law department.