REQUIREMENTS OF SPECIAL NEEDS TRUSTS
A properly drafted Special Needs Trust will preserve assets for the benefit of a person who is disabled so that she can obtain government benefits, and have additional comforts, enjoyment, education, entertainment and medical care not otherwise provided by the government programs. A Special Needs Trust must be written and its terms express. The trust document will be reviewed by the Social Security Administration and Medicaid. All distributions of income and/or principal must be in the discretion of the trustee. The beneficiary cannot be entitled to receive income or principal. The Trustee should be prohibited from making any distribution that would jeopardize the recipient’s benefits. The Special Needs Trust can delineate those items or categories for which distributions are proper. Distributions for support, food, clothing or shelter would affect SSJ eligibility. The trust document can describe in detail permissible distributions, such as recreation, travel, entertainment, medical care not otherwise provided such as hearing aids, glasses or personal companions and aids.
The individual who is disabled must be the sole beneficiary of the trust during his or her lifetime. However, the Special Needs Trust can provide compensation for caregivers and pay for the cost of travel for a caregiver to accompany the individual with disabilities, even if the caregiver is a family member.
4 A Special Needs Trust must be irrevocable. However, some disabilities that are caused by accidents or mental conditions that may be improved with medication may improve or end. Therefore, a Special Needs Trust can provide for discretionary distributions of income or principal as long as the beneficiary is not receiving government benefits. Careful drafting can