FAQs Archive - Ritter Elder Law & Estate Planning

Frequently Asked Questions

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  • What is a Special Needs Trust (a.k.a. Supplemental Needs Trust)

    A special needs trust is a legal instrument that is designed to provide for the care and financial support of a person with disabilities, while also protecting their eligibility for certain government benefits, such as Medicaid and Supplemental Security Income (SSI).

    The purpose of a special needs trust is to allow a person with disabilities to receive financial assistance without disqualifying them from government benefits that are means-tested, which means they are based on the individual’s income and assets. By placing funds in a special needs trust, the beneficiary can receive support and care that supplements, rather than supplants or replaces, their government benefits.

    A special needs trust can be created by an individual for their own benefit, or it can be established by a family member or guardian on behalf of the person with disabilities. There are several types of special needs trusts, including first-party trusts (funded with the beneficiary’s own assets), third-party trusts (funded with assets belonging to someone else), and pooled trusts (established and managed by a nonprofit organization).

    Special needs trusts are subject to strict rules and guidelines, and it is recommended to consult with a qualified attorney who is knowledgeable in this area to ensure that the trust is properly established and managed to achieve the intended goals.

    Click here to visit RELEP’s Special Needs Planning webpage.

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  • What is a D4A Special Needs Trust?

    A D4A special needs trust (also known as a first-party special needs trust) is a type of trust that is funded with the assets of a person with disabilities who is under the age of 65. The trust is established to provide for the beneficiary’s supplemental care and support while preserving their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI).

    The D4A special needs trust is named after the provision in the federal law that authorizes its creation, which is found in section 1917(d)(4)(A) of the Social Security Act. This provision allows a person with disabilities to transfer their assets into a trust that is specifically designed to provide for their supplemental needs without disqualifying them from receiving government benefits.

    The D4A special needs trust can be established by the beneficiary, beneficiary’s parent, grandparent, or legal guardian, or by a court. The trust must also meet certain requirements, such as being irrevocable, having a trustee who is independent of the beneficiary, and providing that any remaining assets will go to the state upon the beneficiary’s death. This last part is known as the Medicaid payback provision.

    It is important to note that a D4A special needs trust is subject to certain rules and limitations, and it is recommended to consult with a qualified attorney or financial advisor who is knowledgeable in this area to ensure that the trust is properly established and managed to achieve the intended goals.

    Click here to visit RELEP’s Special Needs Planning webpage.

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