When it comes to ensuring the stability and security of our loved ones, we want to make sure we are doing everything we can to keep them safe and comfortable. Special Needs Trusts (SNTs), also referred to as Supplemental Needs Trusts, allow individuals who rely on government assistance programs, such as Supplemental Security Income (SSI), to access financial assets without jeopardizing their eligibility for government benefits. Since the Social Security Administration (SSA) reserves SSI benefits for some of society’s most vulnerable members (i.e., those with little to no income or resources), establishing a Special Needs Trust can provide much-needed support to loved ones without putting them at risk of losing their monthly SSI benefits. In other words, an SNT serves as a tool to protect the beneficiary’s needs-based benefits while providing them with supplemental financial assets to support their wellbeing. As you explore your estate planning options in the greater Spokane area, it’s worth enlisting the guidance of a knowledgeable and experienced Washington state estate planning attorney who can help you identify the most appropriate tools that support your goals and vision for the future. Those who may be interested in creating a Special Needs Trust should work with their estate planning lawyer to fully understand the rules and requirements of these tools to minimize potential risks or issues in the future. Let’s take a closer look at how Special Needs Trusts work in Washington state and how working with a dedicated estate planning attorney can help you and your family enjoy a secure and bright future.
What is a Special Needs Trust, and How Does it Work?
Many people with disabilities struggle with the financial implications of not being able to work or earn a steady income. Government assistance programs like SSI provide some benefits to help some of these vulnerable individuals receive some form of regular financial assistance on a monthly basis. However, the SSA sets forth the eligibility requirements for SSI, stating that an application’s resources (i.e., vehicles, bank account balances, etc.) “should not be more than $2,000 for individuals” (or $3,000 for couples). Unfortunately, this means that many people with disabilities who would otherwise benefit from SSI may not be able to access this financial assistance because their monthly resources fluctuate or rise above the $2,000 limit—however slightly. In other words, a well-meaning parent or family member may wish to cover some of the vulnerable person’s expenses, but this financial support could render them ineligible for SSI benefits. This is where Special Needs Trusts come in. These estate planning tools allow family members to provide financial stability for a disabled or vulnerable loved one in such a way that does not put their eligibility for SSI or other government assistance programs at risk. To learn more about how to create a Special Needs Trust for your loved one, you can discuss your specific needs and goals with a knowledgeable and trusted Spokane estate planning lawyer.
What Does a Special Needs Trust Cover?
If an individual already receives SSI benefits, it’s important to understand which expenses should be covered by this income instead of by the funds placed in the Special Needs Trust. Generally speaking, SSI benefits are intended to cover food and shelter costs of the beneficiary. This means that paying rent using the funds in the Speical Needs Trust may be considered a form of “in-kind support and maintenance,” which can trigger a reduction in the beneficiary’s SSI benefits. Instead, the funds placed within an SNT should be used for the costs associated with the beneficiary’s “special needs,” such as education, transportation, clothing, medical costs, or other expenses that the SSA would not categorize as “basic support” (i.e., food and shelter). If you have more specific questions about SSI or SNTs, like can you use an SNT for housing, it’s worth contacting a trusted and caring estate planning lawyer for personalized legal guidance.
Other Benefits of a Special Needs Trust
There are several benefits to creating a Special Needs Trust to support a loved one with a disability without jeopardizing their eligibility for SSI or other forms of government assistance. Since the SNT is a type of trust, a designated trustee will oversee the management of the SNT to ensure that the beneficiary’s best interests are safeguarded as much as possible. With a trusted individual serving in this important role, you can rest assured that your vulnerable loved one will not mismanage the funds or become too overwhelmed to make crucial financial decisions. Instead, their best interests will be protected and upheld by the trustee. Additionally, Washington state permits residents to set up what’s known as an ABLE account that “allows people with eligible disabilities to save for their everyday needs, invest in a tax-advantaged account and prepare for the future without losing their state or federal benefits.” Simply put, ABLE accounts and SNTs provide valuable tools for individuals with disabilities to enjoy continued financial stability without fear of losing their SSI benefits.
Plan for a Brighter Future Today
Whether you are just beginning to explore your estate planning options in the greater Spokane area or you have a specific question about how to protect you and your family both now and in the future, seeking the guidance and support of a highly qualified and experienced estate planning professional is highly recommended. With a knowledgeable estate planning attorney by your side, you will be able to understand your options more thoroughly and make informed decisions with greater certainty and confidence. It’s important to recognize that estate planning does not follow a one-size-fits-all approach; rather, it works best when the process is tailored to address your specific needs and goals. If you are ready to start laying the foundation for a bright and stable future for you and your loved ones, consider reaching out to a caring Spokane estate planning attorney today to learn more.
At Kristina Mattson Law, we believe in partnering with our clients to fully understand their unique needs and goals. Together, we will identify the estate planning options that best suit your concerns and support your visitation for your legacy. Please contact our Spokane, Washington office today at (509) 998-6629 to get started with a dedicated and caring estate planning attorney.
