Many people with disabilities rely on Medicaid as a much needed source of health insurance. Supplemental Security Income (SSI) serves as an ongoing source of modest financial support for people that are in this position.

In order to qualify for these programs, you must be able to demonstrate a significant level of financial need. Once eligibility has been granted, it is not necessarily permanent. An improvement in financial status can cause a loss of benefits.

Special Needs Planning

Sometimes a person with a disability that is relying on these programs will come into money for some reason. For example, a person could become disabled because they were injured in an automobile accident that was not their fault. At some point, they would receive a settlement or judgment that would put them in a different financial position.

Under these circumstances, the resources could be used to establish and fund a supplemental needs trust. Because the assets belonged to the grantor, it would be looked upon as a first party or self-settled trust.

It would be irrevocable, and the trustee that is selected would manage the assets in the trust for the benefit of the grantor. Medicaid does not cover every medical related procedure or treatment that a recipient may want or need, and as we have stated, the SSI payouts are quite limited.

The trustee would be allowed to use assets in the trust to purchase many different goods and services that would enhance the quality of the beneficiary’s life. These would include:

Unpaid medical and dental expenses
Insurance
Educational expenses
Travel costs with or without a companion
Therapeutic and rehabilitative services
Household appliances
Computers and other electronics
Wheelchairs, lifts, and custom vans
A place of residence

It should be noted that any adult that is willing to assume the role can act as the trustee of a supplemental needs trust. However, there is another option that can be a better choice in some instances. Trust companies and the trust departments of banks provide trustee services. A qualified fiduciary can be relied upon to manage the trust in accordance with professional standards.

Medicaid Estate Recovery

Medicaid is required to seek reimbursement from the estates of people that were enrolled in the program while they were alive. When a first party supplemental needs trust has been established, Medicaid could attach the assets that remain in the trust.

On the other hand, if you were to establish a supplemental needs trust for the benefit of someone else with your funds, it would be a third-party trust. When you are executing the trust agreement, you would name a successor beneficiary.

After the death of the first beneficiary, the successor would become the beneficiary, and Medicaid would not be able to touch the remaining resources.

Attend a Free Webinar

We are conducting a series of webinars over the coming weeks, and you can come away with a great deal of useful knowledge if you attend one of these sessions. There is no charge, but we do ask that you register in advance. You can see the dates and obtain more detailed information if you visit our webinar page.

Schedule a Consultation!

Now is the time for action if you are going through life without an estate plan. Even if you have a plan, if it has not been reviewed in many years, revisions may be in order.

Every situation is different, and there are many different approaches that can be taken. When you choose our firm, we will work with you to create a custom crafted estate plan that is ideal for you and your family.

You can schedule a consultation appointment right now if you give us a call at (585) 546-1734. There is also a contact form on this website you can use to send us a message.