Special Needs Trusts

Special needs planning involves specialized knowledge to work with and ensure that disabled persons who have special needs are provided for. Peggy is knowledgeable and experienced in how to maintain continued eligibility for Medicaid and disability benefits while allowing supplements to be received from special needs trusts.

The purpose of these trusts are to maximize a disabled or otherwise special needs person’s available resources available to provide for his or her own care while protecting the disabled person’s qualification for benefits, currently or n the future. These trusts are carefully and individually drafted to comply with current laws for the specific programs the disabled person is receiving or is anticipated to receive. There are different types of special needs trusts depending on types of benefits, age of the disabled person, the source of the funds and the current law governing such trusts. Currently, in Illinois and in many other states, such trusts are exempt from consideration as available resources of the disabled person which may mean that they will not require or trigger reimbursement claims by the state at the death of the disabled person for expenses paid during the life of the disabled person. These trusts are often implemented by parents or guardians of a disabled minor or adult child, who are the primary beneficiaries of the trust, so that the child or disabled person would not inherit a substantial amount of money which would disqualify the disabled person from government benefits. Other trusts may come in the form of inheritance or a settlement of a legal malpractice or injury claim. The funds in these trusts are used to supplement the governmental benefits that the disabled person receives. Upon the death of the disabled person, the trust funds may be distributed to other beneficiaries if the law provides for this.

Careful drafting is necessary to comply with the special requirements of the governmental programs to require that the trustee of a special needs trust has sole discretion to expend as much of the income or principal of the trust as appropriate for the benefit of the individual's comforts and needs not provided for by government benefits. Trust income may be used for the ordinary comfort, care and welfare, provided that there are sufficient monies available for that purpose from federal, state, and local governmental agencies. Trust assets may only be used to supplement and not substitute for or replace governmental benefits. The trustee may not distribute cash to the individual at any time, and the individual may not demand any distribution of funds.