Important special needs trust provisions

By April 12, 2011Uncategorized

If you read this blog with any frequency, you probably have a pretty firm grasp of what a special needs trust is, and precisely why people use them.  Very generally speaking, special needs trusts are used to provide recipients of public benefits with additional support, but without jeopardizing their eligibility for assistance.  Of course, to accomplish this goal, special needs trusts must be drafted carefully, and then the terms of the trust must be closely adhered to.

If you have any interest in establishing a special needs trust, whether a Medicaid special needs trust or a Social Security special needs trust, the first thing you should do is speak with a special needs trust attorney.  Your attorney will advise you on the most appropriate course of action, and will make sure that your trust includes all of the necessary language.  For instance, a properly drafted special needs trust should include language that covers at least the following points:

  • The trust should contain a provision requiring a trustee to consider how any distribution will impact the beneficiary’s eligibility for public benefits.
  • The trust should contain a provision mandating discretionary distributions.
  • The trust should contain a provision describing that the funds should be used to supplement public benefits, not supplant them.
  • The trust should contain a provision forbidding cash distributions to the beneficiary.

These four points give a general idea of the guidelines controlling special needs trusts.  Before you make any decisions about establishing or funding such a trust, however, you should discuss your situation with a special needs trust attorney.