When we talk about helping those with special needs to properly manage their finances, two tools often come up, special needs trusts and conservatorships. For instance, you might hear that a person’s assets are held in a special needs trust, or that a person’s assets are being held in conservatorship. But while these scenarios may indeed sound strikingly similar, they are in fact quite different from one another.
If you read the blog at all, you know that special needs trusts are created to supplement the care and comfort of a person who receives public assistance, without jeopardizing his or her eligibility for those benefits. In essence, although the funds in the trust are to be used for the individual, they are owned by the trust, so Medicaid and Social Security do not count the funds for purposes of determining eligibility. As you can see, special needs trusts play a very important role in helping people with special needs prepare for their future.
Conservatorships, on the other hand, while oftentimes equally important to those with special needs, are a different matter altogether. When an individual loses capacity to handle his or her finances, somebody close to that person may petition the court to have a conservator appointed to manage that person’s finances. Many times, courts appoint conservators to act for a person with special needs, so this is why we sometimes hear about conservators and special needs trusts in the same discussion. But, there are too many differences between the two scenarios to haphazardly lump the two together.
If you would like to learn more about conservatorships, please visit the section of this Site devoted to guardians and conservators.