Disabilities can occur at any age . . .
. . . But disabilities do not have to mean the end of living a full life. However, the specifics of “a full life” for disabled people go well beyond the basic needs provided by government benefits such as Supplemental Security Income (SSI) or Medicaid.
Avoid the “Spend Down”
Most people think that they have to spend down practically all of their financial assets in order to qualify for these governmental benefits, but that is not the case. When financial assets are placed in a Supplemental Needs Trust, also called a Special Needs Trust, a disabled person’s assets can be used to supplement – not replace – governmental benefits.
Special Needs Trusts Complement Government Benefits
A special needs trust can make a huge difference in a disabled person’s quality-of-life. For example, the trust can fund household modifications, furnishings, and durable medical equipment such as a higher quality hospital bed. The trust can fund care management, therapy and medication, and mileage to therapy and doctors. Items such as phone, cable, internet services, books, entertainment, and tuition to online courses can bring the world to the homebound or nursing home-bound person.
Meet the McCunes
Here is an example. Alabama Family Trust managed the special needs trust for the McCune family’s elderly mother. Daughter Debbie McCune said, “In protecting my mother’s money, she was able to continue her life affording all of the amenities she had her entire life: hair salon, manicures, a telephone, a newspaper subscription. She loved reading and always kept up with current events.” In addition, the family had the funds to furnish Mrs. McCune’s private room to look like her home. “She was very comfortable there and enjoyed watching old movies and college football,” Debbie McCune said.
Family members can provide financial help for a disabled relative such as a parent or grandparent without undermining any government benefits. They should work with a qualified lawyer to set up a third-party special needs trust. This type of special needs trust provides for any remaining assets of the disabled person to pass to the desired family members or friends upon the disabled person’s death.
When a disabled person’s own assets will fund the trust, a lawyer can establish a first-party special needs trust. A disabled person, guardian, conservator, or the court can initiate this type of trust. This type of trust has special asset requirements that must be followed exactly to avoid disqualifying the person from receiving government benefits.
Where Does Alabama Family Trust Come In?
When preparing a trust, the attorney will ask who should manage the trust. That is where Alabama Family Trust comes in. Alabama Family Trust is a non-profit 501(c)(3), company established by the Alabama legislature to manage supplemental or special needs trusts. Alabama Family Trust handles big and small trusts (as low as $1500) which allows you to create a trust for a loved one even if you are leaving limited assets for the person. It is a great way to bring the world to a disabled person without endangering their governmental benefits.