If you have a loved one with high medical needs and who necessitates some sort of ongoing support, then you’re probably worried about what their future will look when you’re gone. You might be concerned that without your support your loved one will struggle to make ends meet while securing the treatment and care their medical condition requires. While that’s certainly a risk that you’ll face, you can significantly mitigate or eliminate it with careful estate planning.
Through a special needs trust, you can financially support your loved one without negatively impacting their ability to qualify for key governmental programs like Medicaid. This ensures that they can receive the free or low-cost medical care they need while still having funds left over to live a fulfilling life. That said, you might be left wondering what, exactly, can the funds from a special needs trust cover. Let’s take a closer look.
What can a special needs trust cover?
The trustee who manages a special needs trust will have some discretion over when to release assets to your loved one. That said, here are some of the things that the proceeds from a special needs trust can cover without impacting eligibility for public programs:
- A vehicle for your loved one’s personal use
- The costs associated with medical appointments that aren’t covered by Medicaid or some other type of insurance
- Medical equipment, such as a motorized wheelchair
- Rehabilitation services
- Education and training to try to secure employment
- Furnishings for your loved one’s home
- Insurance premiums
- Costs associated with starting a business
- Home appliances
- Electronics, such as a personal laptop
- Recreational activities
- Transportation services to get to school, work, and medical appointments
As you can see, a special needs trust can cover a lot your loved one’s personal expenses, thereby ensuring that they can live the life you want for them even after you’re gone. Remember, too, that if handled correctly, the special needs trust you create will still allow your loved one to obtain Medicaid coverage so that their medical needs are also met.
Are there things a special needs trust won’t cover?
There are some limitations on the special needs trust. The funds from one of these trusts can’t be used for the following without negatively impacting your loved one’s eligibility for public assistance:
- Mortgage or rent payments.
- Property taxes.
- Gift cards.
- Homeowner’s association fees.
These restrictions aren’t a complete ban on using the trust’s funds for these purposes. However, using the funds in this way could render your loved one ineligible for Medicaid and other forms of public assistance, which can place them in a very difficult financial position. Therefore, when you create a special needs trust, you should name someone you can trust to properly fulfill the duties of a trustee. Only then will you be able to rest assured that your assets and your loved one’s interests will be adequately protected.
Do you want to learn more about how to protect your loved one through estate planning?
If so, then now is the time to start reading up on what the estate planning process has to offer you. There are several options when it comes to trusts, many of which may fit your unique circumstances, giving you the ability to maximize the use of your assets and provide for your loved ones as you see fit. This will take action on your part, though, so don’t shy away from the process. The worst thing you can do is wait to create an estate plan until it’s too late. So, if you have questions or want to learn more about estate planning, then please continue to read through our webpages.