Special Needs Planning
Special Needs Planning demands the attention and takes much of the "free" time of parents of a person with a disability. A topic often thought about but not understood is the formation and operation of a Supplemental Needs Trust (a "SNT"). SNT are fully sanctioned by both State and Federal Law and will not affect the Governmental Benefits of an individual with a disability (the "beneficiary"). There are three types of SNT's: a first party trust, a third party trust and a pooled trust. A first party trust is funded with the beneficiaries own money, often a personal injury award or an inheritance. If the money is used to fund the SNT, then it will not be counted as an available resource. This will continue the beneficiary's eligibility for Government Benefits or allow him/her to apply and receive Government Benefits. The big advantage of a first party SNT is that it provides a suorce of funds for goods and services that enhance the life style of the beneficiary, such as, uninsured medical expenses, experimental or alternate medical treatments, internet, computers and vacations. Just about anything but food and shelter can be paid for by the SNT. A distinguishing feature of a first party SNT is that when the beneficiary dies, the money left in the SNT must be used to "pay-back" the state for the medicaid benefits the beneficiary received during his lifetime. A third party SNT is funded with money from someone other than the beneficiary, such as a parent, grandparent, aunt, uncle or special friend. Third party SNT's function the same as a first party SNT to enhance the life style of the beneficiary. The major difference is that when the beneficiary dies what remains in the SNT does not have to be used to "pay-back" the State. Instead, it can be paid to someone else, such as a child, grandchild, niece or nephew. A pooled SNT is sponsored by a charity and is very useful when the beneficiary does not have a close relative or friend to serve as Trustee or the amount involved is not enough to warrant the formation of an individually created SNT.
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