A Special Needs Trust is a trust designed to provide benefits to a disabled or elderly beneficiary while preserving the eligibility of public, private, or government benefits available to the beneficiary. Special Needs Trusts are frequently used to receive an inheritance, to receive a gift, settlement proceeds or litigation or insurance settlements.
A Special Needs Trust allows a trustee to pay for special and supplemental needs, shelter the assets from the claims of creditors and from the demands of the beneficiary her/himself, and allows the beneficiary to receive governmental benefits, including SSI or Medi-Cal.
A Special Needs Trust can be funded through a will, a trust, lifetime gifts made directly to the trust instead of to your disabled or elderly beneficiary. A Special Needs Trust can also be established when a disabled or elderly beneficiary is to receive an inheritance or money from a lawsuit or life insurance proceeds to avoid losing eligibility of public, private, or government benefits. A Special Needs Trust is usually established by a parent, grandparent, legal guardian or court.
The Special Needs Trust can be used for various expenditures, among others, such as:
- Out-of-pocket medical and dental expenses
- Eyeglasses
- Annual independent check-ups
- Transportation (including vehicle purchase)
- Maintenance of vehicles
- Insurance (including payment of premiums)
- Rehabilitation
- Essential dietary needs
- Purchase materials for a hobby or recreation activity
- Purchase a computer or electronic equipment
- Pay for trips or vacations, pay for entertainment like going to a movie, a ballgame, concert, etc.
- Purchase of goods and services that add pleasure and quality to life: videos, furniture, or a television
- Athletic training or competitions
- Personal care attendant
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