Who Needs a Special Needs Trust?

For disabled clients, asset sensitive programs such as Medicaid and SSI can be lifelines providing thousands of dollars in assistance per month. When benefits are lost after a settlement, medical and living expenses that were previously covered by the government quickly drain the client’s bank account, negating the benefit of their settlement.

Fortunately,  federal law (42 U.S.C. § 1396p(d)(4)(A)) allows for the creation of a Special Needs Trust to hold settlement funds for the client’s benefit, while allowing the client to maintain eligibility for asset sensitive programs. Funds placed into a Special Needs Trust (A.K.A. Supplemental Needs Trust) are able to be used for travel, recreation, luxury items, and therapies not covered by the client’s government benefits. For more details on creating a Special Needs Trust, see our blog article here.

The creation of a special needs trust is essential to protecting the interests of a disabled client who is benefiting from an asset sensitive program. However, some government benefit programs are not asset sensitive. In Florida, many children benefit from “Family-Related Medicaid.” Family Related Medicaid is not asset based, thus children on this program can receive assets without jeopardizing their benefits (subject to Florida’s court approval scheme). Likewise, MediCARE is not subject to an asset limit, although Medicare beneficiaries receiving settlements should be counseled about the prudence of a Medicare Set Aside.

Typically, disabled adults receiving SSI  and MediCAID are ideal candidates for a Special Needs Trust. However, clients are often confused or misinformed regarding the exact government programs they are receiving benefits from, so it is important to check for yourself. This can be accomplished by having your client log into the social security website.

If you have questions about a pending settlement or government benefit issue, Florida Probate Law Group is available to help with a free consultation. Call 352-354-2654 or email cdavid@circuit8law.com. We work statewide, usually with no fees or costs upfront.