Bowie, MD 20715
Phone: (301) 464 7448
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Special Needs Trusts
Current laws allow a disabled person to receive government assistance for care and support and still receive other support that supplements, but does not supplant his government benefits. These trusts are generally known as supplemental or special needs trusts (SNTs) and, like all trusts, are invisible containers to hold assets.
To qualify as an SNT the trust language must state that neither the disabled person, the government, nor any court would have the authority to dictate to the trustee how to spend trust funds. Furthermore, the language should forbid the trustee to use the money to pay creditors of the disabled person. This provision is called a spend-thrift provision.
Trust language should offer suggestions for discretionary distribution of the money in ways the grantor believes would enhance the life of the disabled person. Examples of such discretionary distributions might be the purchase of a VCR, payment for someone to take the disabled person to his favorite restaurant or travel expenses to visit a sister.
Traditionally SNTs have been used to address the planning concerns of parents with disabled children. These trusts are also used when a disabled person receives a personal injury or tort settlement in an amount sufficient to eliminate their government benefits but not sufficient to support them for a lifetime. It is not these trusts that are special, but the needs of the beneficiary. The beneficiary’s needs dictate the purposes, limitations and opportunities for distributions by the Trustee.
Whether the trust is established with the disabled person’s own money or funds belonging to another person has significant implications under the law. Trusts established with assets of the government beneficiary must include a pay-back provision to the state.
Byrd & Byrd, LLC appreciates that disabled children are just as likely to be part of a wealthy family as any other and that illness is no respecter of persons. Our legal training allows us to understand the intricacies of the law governing SNTs and our experience ensures the ability to produce effective documents addressing a multitude of circumstances.
