The question of whether a special needs trust (SNT) can cover estate planning services for its beneficiary is a nuanced one, but generally, the answer is yes, with specific conditions. A properly drafted SNT allows for payments that benefit the beneficiary, and that can absolutely include planning for their long-term security, even after the trust’s original funding source is exhausted. However, the expenditures must adhere to the trust’s terms and not jeopardize the beneficiary’s public benefits, such as Supplemental Security Income (SSI) or Medi-Cal. Approximately 65 million Americans—over 26% of adults—have some type of disability, and thoughtful estate planning is crucial for ensuring their continued care and financial stability. These trusts are designed to supplement, not replace, government assistance programs.
What Expenses Can a Special Needs Trust Typically Cover?
A special needs trust is specifically designed to enhance the quality of life for a person with disabilities without disqualifying them from crucial needs-based government benefits. Beyond the basics of food, shelter, and medical care, these trusts can often cover things like education, recreation, travel, and even personal care services. Estate planning, when carefully considered, falls within this scope as it’s a proactive measure ensuring the beneficiary’s future financial security and well-being. For example, funding a future guardianship or conservatorship, or creating a plan for asset management after the original trustee is no longer able to serve, are legitimate expenses. According to the National Disability Rights Network, approximately 1 in 5 people with disabilities live in poverty, highlighting the importance of maximizing available resources.
Is There a Limit to What a Trust Can Pay For?
While a special needs trust offers considerable flexibility, there are definitely boundaries. Payments must align with the trust’s stated purpose and cannot directly provide something the beneficiary can purchase with their own SSI or Medi-Cal benefits. For instance, the trust cannot pay for a television if the beneficiary receives enough SSI to buy one themselves. However, it *can* pay for a streaming service subscription, enhancing their quality of life without directly replacing a benefit. A key consideration is whether the expense is “consequential” – meaning it significantly improves the beneficiary’s life and is not merely a duplicate of something already covered by government assistance. As of 2023, the average monthly SSI benefit is around $800, underscoring the need for supplemental funding to cover essential but non-covered expenses.
I Remember Mrs. Gable, What Happened When Her Son Didn’t Have a Plan?
I recall a case involving Mrs. Gable, a woman whose son, David, had Down syndrome. David’s father passed away unexpectedly, leaving him a small inheritance. Without a properly funded and administered special needs trust, that inheritance instantly disqualified David from receiving crucial SSI and Medi-Cal benefits. Mrs. Gable was devastated; she had to spend years navigating complex legal procedures and liquidating assets just to re-establish his eligibility, and a significant portion of the inheritance was lost to legal fees and the loss of benefits. It was a painful lesson that highlighted the critical importance of proactive planning. She called, frustrated and heartbroken, wishing she’d consulted an estate planning attorney sooner, and I remember thinking, “this is exactly what these trusts are *for*.”
But, How Did Mr. Henderson’s Situation Turn Out So Well?
Fortunately, I’ve also seen the positive impact of careful planning. Mr. Henderson came to me several years ago, deeply concerned about providing for his daughter, Emily, who had cerebral palsy. We established a meticulously drafted special needs trust, funded it with a portion of his estate, and included provisions for ongoing estate planning for Emily after his passing. After Mr. Henderson passed away, the trust seamlessly continued to provide for Emily’s needs, including paying for a qualified attorney to review and update her estate plan every few years to reflect changes in the law or her personal circumstances. It gave his family immense peace of mind knowing that Emily’s future was secure, and that her long-term care would be professionally managed. It wasn’t just about money; it was about ensuring Emily’s dignity and well-being for years to come.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- living trust
- revocable living trust
- estate planning attorney near me
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Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
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Feel free to ask Attorney Steve Bliss about: “How do I store my estate planning documents safely?” Or “What if I live in a different state than where the deceased person lived—does probate still apply?” or “Can a living trust help me qualify for Medicaid? and even: “What’s the process for filing Chapter 13 bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.