Disabled Veterans Can Utilize Special Needs Trusts to Protect Pension Benefits

Tampa Disability attorneyAn unfortunate reality of serving in active duty during a period of war is that many veterans return from their service in places like Iraq and Afghanistan with significant long-term disabilities and mental health problems. Statistics show that the majority of these men and women are still very young (generally under 30), unmarried, and completely reliant on parents and other loved ones for care once they return to the states.

Here in Florida, we have an exceptionally large population of disabled military veterans who require continuing care for serious and life-altering issues such as PTSD, traumatic brain injuries, physical handicaps, depression, and anxiety. These conditions are often severe enough to prevent the veteran from assimilating back into everyday life, including the ability to find a job or maintain employment.

Fortunately, the military has benefit programs to help support disabled veterans. The downside is that some of the programs for low-income veterans, such as the Veterans Disability Pension Benefit, are “need-based,” meaning that the veteran must comply with strict asset and income limitations or the benefits will be stopped. This can present a problem for veterans who need more than what their pension offers each month to get by.

The good news is that a Special Needs Trust can be set up on behalf of the veteran with mental or physical disabilities to hold any money or assets that go over and above the VA’s threshold so that benefits are never at risk. The assets held in the trust can be used for the benefit of the veteran, while technically being “owned” by the trust, which is an acceptable planning strategy under the law and the VA’s guidelines.

We often recommend this option to family members of veterans who want to set up GoFundMe campaigns to raise money for medical expenses, housing, therapies, travel opportunities and so forth. By having others make their donations for the veteran directly to the Special Needs Trust, the veteran can safely use those funds toward their daily expenses without jeopardizing benefits.

Parents and loved ones can also leave any inheritance they wish for the veteran to receive to the Special Needs Trust as well without worrying about cutting the veteran off from their monthly pension. This helps to ensure that the inheritance remains a supplemental “nest egg” and savings account, rather than putting veteran into an “all or nothing” position.

Finally, keep in mind that special needs planning is not a “one-size-fits-all” approach. It’s important to consult with a special needs attorney when planning for the future to ensure that you are staying compliant with all rules and regulations regarding Special Needs Trusts and VA benefits. If you have specific questions or you’d like help getting started creating a Special Needs Trust for a veteran with disabilities, please contact our office at (813) 438-8503 to schedule a consultation.

By |2020-02-10T15:38:41+00:00February 8th, 2020|Categories: Special Needs, Trusts|Tags: , |Comments Off on Disabled Veterans Can Utilize Special Needs Trusts to Protect Pension Benefits