A special needs trust can be a great way to ensure that your loved one receives financial support from you without negatively impacting their ability to qualify for key government programs like Medicaid.
This can be crucial if your loved one has extensive needs, as receiving support from you and the government might be the only way they can find the stability that you want for them when you you’re no longer around.
How can special needs trust assets be used?
That said, a lot of people considering a special needs trust worry about how its assets can be used. After all, there are some restrictions on the utilization of these trust assets.
However, the restrictions are narrow, and the allowable uses of special needs trust assets is broad. In fact, your loved one will be able to use trust assets for the following:
- Medical equipment not covered by insurance
- A car
- A vehicle that is especially equipped to transport someone with special needs
- Home furnishings
- Electronic equipment, like a computer
- Recreational activities
That covers a lot. But here are some of the major restrictions that your loved one might face when it comes to the use of these assets, including a bar on using them for:
- Payment of rent or a mortgage
- Grocery bills
- Property taxes
So, your trustee will need to be careful with how the trust’s assets are handled. They should refrain from distributing cash from the trust or using trust assets to purchase gift cards for the beneficiary, as these actions could have negative implications for your loved one’s ability to secure support through Medicaid.
Are you ready to protect your loved one’s future?
If so, then now is the time to fully consider your estate planning options. To learn more about the options at your disposal, please continue reading our blog and educating yourself as much as possible.