Nearly everyone uses some form of transportation on a consistent basis, but the need for a safe, reliable vehicle is especially important for people with special needs. Government benefit programs such as Supplement Security Income (SSI) and Medicaid impose an asset ceiling as a condition of qualification, which is a major reason to set up a special needs trust for your disabled loved one.
However, these government programs do not count vehicles as an “asset” due to the fact that they are needed in order for the disabled person to obtain basic necessities. A good vehicle that has been adapted to fit the needs of a disabled person can cost more than $70,000, plus maintenance and adaptive equipment.
Because of these high costs, the trustee of a special needs trust may be asked to distribute funds for the purchase of a vehicle for the disabled person. Often, this request includes a specific vehicle or specific adaptations that the beneficiary needs.
Read on to learn what you should consider before using funds from a special needs trust to purchase a car, and find out how Alabama Family Trust handles these types of situations.
Consider Safety Concerns
The beneficiary must have a reliable, safe vehicle that will transport them comfortably. In order to make this happen, there must be a detailed assessment of the beneficiary’s and the driver’s transportation needs. For example, who will be driving the vehicle? Does the driver have any history of seizures or other neurological issues? Do they have a driver’s license already, or will they be able to obtain one? Has the driver been assessed to determine what sort of adaptations they will need?
Sometimes, an assessment is necessary before the trustee can approve the use of funds for a vehicle. Regardless of what type of vehicle the beneficiary or his family member requests, in the end, the trustee must exercise their own judgment and determine the best course of action for the beneficiary. Trustees are not usually vehicle assessment experts, but they should consult with someone who is qualified in that field before making a decision.
Consider Who Should Own the Vehicle
Depending on circumstances, there are three parties who may own the vehicle: the beneficiary, the trust, or the beneficiary’s legal representative.
If the trust owns the vehicle, then the trustee controls what happens with the vehicle. This can be helpful if the beneficiary is unstable in some way or if they are vulnerable to being exploited financially; the trust can prevent any unwise transfer of the vehicle. Also, if the beneficiary already owns another vehicle, having the trust own the new one may be wise regarding public benefits planning.
If the beneficiary can safely operate the vehicle, is competent, and is not at risk for exploitation, then it may be best for the beneficiary to own the vehicle. This can give the beneficiary a sense of independence and autonomy, but they must be able to manage the vehicle without concern for their safety or the safety of others.
Alabama Family Trust and Vehicles
There are a multitude of other considerations that must be made when it comes to using funds from a special needs trust to purchase a vehicle for the beneficiary, especially when it comes to ownership. As trustee, Alabama Family Trust has helped many beneficiaries by purchasing vehicles for them with funds from their special needs trust. We can also use trust funds to pay for maintenance, repairs, gasoline, and insurance.
If you are considering setting up a special needs trust for a disabled loved one, please give us a call! We can walk you through the entire process from start to finish, and we know all the ins and outs of purchasing a vehicle for the beneficiary. Contact us today!