Whether you depend on Medicaid benefits as a disabled person or have concerns about a loved one in this position, it is helpful to review the options that you have and take steps to work toward financial security. For some disabled people, special needs trusts play an important role in safeguarding assets as well as Medicaid eligibility.
While other types of estate plans can disqualify one for Medicaid because the assets in the trust count as their resources, special needs trusts are an exception. However, it is vital to understand how these trusts work as well as the requirements.
Reviewing special needs trust requirements
The New York State Department of Health covers the requirements associated with special needs trusts. For starters, these trusts are set up for people with a certified disability while they are less than 65 years old. Moreover, those setting up a special needs trust must use the disabled person’s individual assets.
If you struggle with a disability, you could set up a special needs trust for yourself. Also, a disabled person’s parent, grandparent or legal guardian can create a special needs trust on their behalf. In some instances, courts create these trusts for disabled individuals.
Death and special needs trusts
In addition to the aforementioned requirements, special needs trusts must contain language which stipulates that when the disabled individual dies, the state receives assets left in their trust for Medicaid benefits paid out. It is crucial to understand these requirements if you are thinking about establishing a special needs trust and make sure you carefully evaluate your options.