A special needs trust is designed to provide financial support for individuals with physical or mental disabilities who cannot manage their own finances. This includes children with disabilities and adults who require assistance making important life decisions due to mental disabilities or deficiencies. The trustee makes financial decisions in the beneficiary’s steed and uses funds within the trust to pay for various medical and living necessities.
Additionally, a special needs trust allows a person to create an inheritance fund for a loved one or family member with disabilities without jeopardizing their qualification for government assistance. Funds procured from a settlement on the individual’s behalf can also go into the trust. Acquiring assets can disqualify a person from government assistance programs, but a special needs trust avoids this issue since a third party holds complete control of the funds.
Trustees use funds within the trust for an assortment of purposes and these uses do not need to directly relate to medical items or the individual’s disability. A special needs trust defines “special needs” as anything the beneficiary does not receive through government assistance programs. Therefore, the uses of a special needs trust can range from home and vehicle maintenance to educational expenses and monthly bills.