Why it is Used
Special Needs Trusts are trusts established for disabled individuals under the age of 65. The goal of the trust is to hold funds that the disabled individual may have received from settlement, inheritance, or earned or received prior to the onset of a disability to improve quality of life without effecting eligibility for programs like Medicaid, SSI or SSDI. Funds in a special needs trust can be used for extras like:
• Attendance or participation at recreational or cultural events;
• Travel and vacations;
• Participation in hobbies, sports or other activities;
• Funds for special dining experiences like a visit to a restaurant or food delivery;
• Funds for specialty clothing items;
• Visiting friends;
• Exercise Equipment not covered by Medicaid;
• Cosmetics or medical or dental procedures not covered by Medicaid;
• The cost difference between a shared and private room;
• Telephones, cable television, televisions, radios, cameras, etc.
• Memberships in clubs;
• Subscriptions to magazines and newspapers;
• Small, irregular amounts of personal spending money;
• Counseling and guidance;
• Someone to visit the individual or monitor services received;
• Vocational rehabilitation or habilitation if unavailable through a covered source;
• Items which Medicaid or other government programs do not cover or have denied payment or reimbursement for;
• Other expenditures used to provide dignity, purpose, optimism and jot to the beneficiary.
The trust cannot be used for essentials like food and shelter or medical care covered by Medicaid without effecting eligibility for Medicaid, SSI or SSDI. The rules governing eligibility under Medicaid and Social Security are complicated. If you have specific questions regarding your intended expenditures and how they could affect eligibility, it is best to discuss the same with an elder law attorney.
There are two kinds of special needs trusts funded with disabled individual’s funds. They are the same in some aspects. They are only available to disabled individuals who are under age 65 and assets in the trusts are exempt for Medicaid and Social Security purposes. However, there are also some differences as outlined below.
Medicaid Pay Back Trust–
• It must be set up by the individual’s parent, grandparent, legal guardian or a court.
• It must contain funds of the disabled individual but can also contain funds of others.
• It must contain a pay-back provision reimbursing the State of Ohio for all funds expended for the benefit of the individual upon the individual’s death.
• It is administered by a trustee.
• Can be set up by the individual.
• It can only contain funds of the individual.
• All funds remaining in the trust upon the disabled person’s death will be repaid to the State or distributed to the non-profit managing the trust.
• It is administered by a non-profit.
To explore a special needs trust further, contact a local Medicaid planning attorney.