If you’re the parent or caregiver of someone with a disability, you may have considered setting up a Special Needs Trust. The purpose of such a trust is to provide for your loved one’s needs without jeopardizing their eligibility for benefit programs like Medicaid or Supplemental Security Income (SSI). While most families who have a loved one with disabilities can benefit from having a Special Needs Trust in place, it is not the only planning option available. If you are worried that a Special Needs Trust may not be the best option for your family, a qualified Tampa special needs lawyer can help you evaluate alternative planning options.
Created under the Achieving a Better Life Experience Act of 2014, ABLE accounts are designed to allow a person with a disability to have money set aside for them without affecting their eligibility for benefits. ABLE Accounts are similar to 529 Plans with the key difference being that the ABLE Accounts cover expenses related to the disability rather than to a college education. More than one person can contribute to an individual’s ABLE account as long as the total amount of all contributions do not exceed the allowable amount which is currently set at $15,000 per year.
There are a few requirements that need to be met in order for an individual to be the beneficiary of an ABLE account.
- The individual must have been declared disabled before the age of 26
- They can only be the beneficiary of one ABLE account
- The funds are to be used for qualifying disability expenses (housing, medical treatment, etc.)
Spending Down Assets
If a person with a disability receives some type of lump sum payment such as a settlement or inheritance, it could affect their eligibility for benefits. In order for those payments not to be counted as assets, they would need to be spent on certain resources allowed by Medicaid and SSI. Keep in mind that spending down assets on exempt expenditures without jeopardizing benefits can be tricky and may trigger other legal issues, so be sure to contact a Special Needs Attorney before making any decisions.
In some cases, the amount of a person’s assets may not be enough to justify the expense of a Special Needs Trust. This is when a pooled trust may be a better option. As the name suggests, a pooled trust consists of contributions made for multiple beneficiaries which are then combined (“pooled”) and invested for those beneficiaries. Pooled trusts are managed by non-profit organizations.
If a Special Needs Trust just doesn’t seem like the best option for your loved one, there may be alternative solutions to suit your family’s needs. Our special needs planning attorneys can help you explore all of your options to determine which one is right for you. If you’re ready to get started, simply call our Tampa-area law firm at (813) 438-8503 to schedule a consultation.