Marc J. Soss, Esq. | (941) 928-0310
​2070 Ringling Blvd., Sarasota, FL

SARASOTA & MANATEE COUNTY FLORIDA SPECIAL NEEDS TRUST PLANNING

Inheritance | Estate Planning | Disabled Adult or Child | Injury Settlement

Caring for a Special Needs child or adult is a full-time job. However, many parents fail to plan for what happens after they are deceased. While it might seem like a good idea to simply leave an inheritance for a disabled person to a close family member or someone that you feel you can trust, with the understanding that the money will be spent on the disabled person, there are many things that could go wrong. Utilization of a Florida Special Needs Trust avoids potential problems without putting emotional strain on a family. The Special Needs Trust provides for the needs of a disabled person without disqualifying him or her from benefits received from government programs such as Social Security and Medicaid. This allows the monthly government benefits they receive to be spent on food, clothing and shelter and the Special Needs Trust funds can then go toward any additional needs the disabled person may have (purchasing a home or handicap accessible vehicle).

A Florida Special Needs Trust makes it possible to appoint a trustee to hold property for the benefit of the disabled person after you are gone. The trustee for a special needs trust for a disabled person can be (i) a trusted family member, (ii) family friend, (iii) special needs teacher, (iv) bank, or (v) other financial institution.  In order to be effective, a Special Needs Trust document must contain language that (i) makes it impossible for the disabled person to demand that the trust funds be distributed; (ii) gives the trustee full discretion to spend the trust assets as he or she sees fit; (iii) the trust isn't intended to be a basic support trust (used solely as supplement benefits); and (iv) the trust is to be administered so that eligibility for public government assistance is never jeopardized.

TYPES OF SPECIAL NEEDS TRUSTS:

Third-Party Special Needs Trust: Leaving a disabled beneficiary an inheritance in a trust. When the beneficiary of the special needs trust passes away, any remaining inheritance is passed along to other beneficiaries. This protects the beneficiary from loosing the government assistance they are receiving. 

Self-Settled Special Needs Trust: A self-settled special needs trust is created by the person already receiving disability income.  Self-settled special needs trusts are typically created when the person receives a large sum of money from an inheritance or a large settlement but wants to receive disability benefits.  The money in the self-settled special needs trust is off-limits to the person receiving benefits and after the person passes away, government services and other programs are repaid using the money in the trust.

Government Benefit Requirements for Disabled Persons: In order to qualify for the Social Security Administration's Supplemental Security Income Benefits, ("SSI"), a disabled adult cannot hold more than $2,000 in assets, excluding a car and a home. SSI benefits must be spent on food, clothing and shelter expenses. Eligibility for SSI makes a disabled person eligible for food stamps and Medicaid, which pays medical expenses, nursing home care and mental health services.  These benefits aid in a disabled person's ability to care for him or herself and leaving them an inheritance would disqualify them from receiving these benefits.   

BIGGEST MISTAKES:

(i) Holding assets in the name of or joint name with the Special Needs child or adult; (ii) naming the Special Needs child or adult as the beneficiary under a Will, retirement account or insurance policy; or (iii) naming the Special Needs child or adult as the "pay-on-death" or "transfer-on-death" beneficiary of a financial account. Direct receipt of these funds will terminate the Special Needs child or adults eligibility for government benefits until the funds have been expended.