Special Needs Trust


Special Needs Trust Lawyers in NYC, Ensuring Your Disabled Loved Ones Are Cared For

If you have a loved one who suffers from a severe and chronic disability, you may constantly worry about their care. After all, many people with such disabilities live long lives — and this means they could need care long after you're gone. Fortunately, it's possible to ensure this care is provided through a special needs trust. Establishing such a trust allows you to provide care and leave assets behind for a disabled person. Of course, you may wonder why you can't just grant these funds to your loved one without such a legal document. A special needs trust lawyer in NYC can help answer this question and many others.

At Marchese & Maynard, LLP, our team of skilled legal professionals has spent years helping our clients ensure their family members and loved ones are provided for. The simple fact is that you may not always be around to assist someone you love who lives with disabilities. Fortunately, you can ensure they're cared for as part of your estate plan. An NYC trust attorney can help you understand the unique circumstances of your situation and how to create a fund that continues to provide financial support in your absence. And since you can get a free consultation with the special needs trust lawyers at Marchese & Maynard, LLP , there's nothing to lose by reaching out.

What Is a Special Needs Trust?

Frequently referred to as a Supplemental Needs Trust (SNT) in New York, a special needs trust is a fund that provides financial support for a person with severe and chronic disabilities. The beneficiary of this fund must have a physical or mental impairment that's expected to result in a need for long-term care. It must also be the case that the beneficiary may need to rely on public benefits. If each of these requirements is met, a trust can be established either with money owned by the beneficiary or the person creating the trust (i.e., the grantor). From that point, the person managing the trust (i.e., trustee) distributes assets as needed.

The money in a trust can be used to cover various expenses. These include:

  • Personal care products
  • Event tickets
  • Restaurant meals
  • Motor vehicle costs (e.g., gas, insurance)
  • Vacations
  • Education
  • Dietary needs
  • Hobbies

You may notice that healthcare needs or medical care were not specifically mentioned on this list. That's because the primary motivation for creating such a trust is to meet the needs of a person beyond what public benefits provide. A special needs trust lawyer in NYC can help you understand the many expenses that fall into this category — along with the necessary steps to avoid common pitfalls with such trust funds. Keep in mind that healthcare needs can be covered with these funds, but it's imperative that both you and the trustee are aware of the right way to do so. Contact us today for a free consultation to learn more.

What Are the Benefits of Special Needs Trusts?

Setting up a trust is an important part of estate planning. When the money comes from the beneficiary, the fund ensures responsible management of assets now and in the future. The same is true when a third-party grantor puts money and property in such a fund, but in doing so, they typically also engage in asset protection for themselves. However, the biggest benefits of special needs trusts come in the form of protecting a person's eligibility for public benefits. Many such benefits have income and asset limit requirements, and these trust funds can ensure a disabled person is still able to meet them. Here's what you should know about each:

Protection of Medicaid Benefits

As of 2022, New York's Medicaid income limit was $934 monthly. The asset limit was $16,800. If a person exceeds either of these thresholds, their Medicaid eligibility can be lost. Obviously, this isn't very high for a place like New York City, where the median monthly rent is over $2,000. A special needs trust allows disabled persons to access necessary funding and care without losing Medicaid benefits.

Protection of Supplemental Security Income

The Social Security Administration provides Supplemental Security Income (SSI) for many individuals. However, it also has income and asset limits. As of 2022, the monthly income limit was less than $900. The asset limit was only $2,000. Once again, these thresholds are not difficult to exceed in New York City. Even worse, the loss of SSI also results in the loss of Medicaid. Ensure you speak with an NYC special needs trust lawyer to avoid such issues.

Protection of State Government Benefits

Like the preservation of Medicaid and SSI government benefits, a special needs trust can protect eligibility for New York state programs as well. It can even allow those with special needs to continue receiving help from private and non-profit groups. Of course, eligibility requirements can vary significantly between programs. This is why having a trusted attorney on your side is imperative for understanding what you can expect.

Continued Care for Loved Ones in Your Absence

The cost of living for a person with a disability can be extreme. An individual with cerebral palsy will see an average of nearly $1 million in just medical costs over their lifetime. This doesn't even include things like rent, assistive technology, homeowner's insurance, and other common expenditures. With the help of a special needs trust attorney in NYC, you can supply continuing care and financial support for a loved one above and beyond what government benefits provide.

What Are the Different Types of Special Needs Trusts?

Special needs trusts can be complex and often come with many nuances. However, every such fund falls into two basic categories. You can either create a self-settled special needs trust or a third-party special needs trust. There are some differences between these two, but the most obvious distinction is in who funds the trust. Regardless of the option you choose, both will still provide protection for SSI benefits and other public benefits. Here's what you need to know about each option:

  • Self-settled Supplemental Needs Trust: This first-party trust is created with assets from a person living with disabilities. These funds often come from inheritance monies, but court settlements are also a common source. For instance, the money from a personal injury settlement stemming from an accident that caused the disability may be used.
  • Third-Party Supplemental Needs Trust: A third-party special needs trust is created with assets provided by parents, friends, or other relatives. Special needs trusts of this type can be established as singular legal documents or as part of a person's will and larger estate plan.

Other than the funding source, the next major difference between these two trusts is the necessity of a Medicaid payback. With a self-settled special needs trust, money that remains in the fund following the beneficiary's death must be paid back to Medicaid. This is not the case with a third-party special needs trust. Even with these distinctions, though, the types of SNT funds available are still more alike than they are different. The primary similarity is that the beneficiary cannot have direct access or control of the assets — even if their money is what initially funded it. A special needs trust attorney in NYC can help you better understand this and other requirements. Contact us today.

Are There Any Other Pitfalls to Trust Funds?

Special needs trusts provide various benefits for disabled loved ones, but problems can arise if you're not careful. That's why you should speak with an attorney with relevant legal experience before creating such a legal document. Otherwise, the parents of a special needs child may end up hindering their loved one without realizing it. Here are a few things to consider when creating these trust funds:

  • Disbursements should be made to providers: A trustee may be tempted to transfer money to a beneficiary so they can cover their own bills. Unfortunately, such payments will reduce SSI income dollar for dollar. Because of this, money should be paid directly to vendors who provide goods and services. The same applies to purchasing essential items like furniture and paying utility bills.
  • Loss of control: One of the primary disadvantages of a special needs trust is that the beneficiary does not have control over their assets. In many cases, this can be a good thing. It ensures that money lasts as long as the beneficiary needs it. However, not all disabled individuals can manage money and care for themselves. With the help of an NYC estate planning lawyer, you can figure out the best way forward.
  • Be mindful of other potential inheritances: It's important to have conversations with other loved ones regarding potential inheritances left to a special needs child. Even if you've set up a trust with the primary focus of protecting public benefits for your family member, other bequests could deem them ineligible for those benefits.

For every benefit provided by a special needs trust, there are many potential pitfalls. This is why it's so important to work with a skilled attorney. Leaving assets to a disabled loved one should be simpler than it is, but we have to work within the confines of federal and state law. Fortunately, it's very possible to do this. With the help of a special needs trust lawyer in NYC, you can ensure your loved one is cared for without causing them to lose vital government benefits. This serves as an asset protection measure for you and your relative. Reach out to our law firm today to learn more.

Contact a Special Needs Trust Lawyer in NYC Today

A special needs trust is one of the most important estate planning tools available to those who have a family member suffering from disabilities. Unfortunately, many parents and other loved ones who care for these individuals don't recognize this importance. They live with the misguided belief that simply leaving behind an inheritance is enough, but such an act can result in the loss of government benefits and other disadvantages. Whether you need to establish a self-settled supplemental needs trust or a third-party trust, it's likely in your best interest to have a skilled legal professional on your side.

At Marchese & Maynard, LLP, that's exactly the experienced legal representation you'll find. Our law firm is well-established and trusted throughout the five boroughs. We've spent years meeting the estate planning needs of our clients — including establishing trust funds to care for loved ones in their absence. We can assist in the creation of these important legal documents so that your family member has financial support without the loss of public benefits. Contact us today to learn more by calling 516-869-1111 and scheduling your free consultation. Our special needs trust lawyers in NYC are ready to help.

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