A Supplemental Needs Trust is a specialized type of trust designed to benefit individuals with disabilities while preserving their eligibility for government assistance programs, such as Medicaid and Supplemental Security Income (SSI).
This trust allows assets to be held for the benefit of the individual without counting against the asset limits imposed by these programs.
The trust is typically funded by a third party, such as a family member or friend, and is managed by a trustee who has the discretion to spend the trust funds for the individual’s supplemental needs. These needs may include items and services that enhance the individual’s quality of life, such as medical care not covered by public assistance, educational opportunities, or recreational activities.
It is important to structure a Supplemental Needs Trust carefully to comply with state and federal laws. For instance, the trust must be irrevocable, meaning that once it is established and funded, the creator cannot alter or dissolve it. If the trust is not correctly set up, it could jeopardize the beneficiary’s eligibility for essential public benefits.
In Texas, the laws related to Supplemental Needs Trusts are designed to align with federal regulations, and these trusts can be established by various means, including through a will or a living trust. This makes it crucial for families with members who have disabilities to consult with legal professionals who specialize in estate planning and trusts to ensure proper administration and compliance with legal requirements.
« Back to Glossary Index