A Special Needs Trust (sometimes also called a “Supplemental Needs Trust”) is a specific kind of living trust for the use of a disabled beneficiary who either is, or at some time in the future may be, eligible to receive certain types of benefits or State or Federal assistance that is based upon the financial needs of the beneficiary. For example, Medicaid, COPES, SSI, and Section 8 housing are all programs that will provide benefits to persons who qualify as indigent (which usually means having less than $2,000 in nonexempt resources). If such disabled person is to receive or inherit a lump sum of money, the funds can sometimes be protected for the use of the disabled person without disqualifying them from continuing to receive such benefits, through the use of a Special Needs Trust.
There are essentially two types of Special Needs Trusts, those which are created by another person (such as a parent, grandparent or other relative) as a way of gifting or leaving their own money to the disabled person; and those which are established using funds which are already owned by the disabled person or funds which the disabled person is already entitled to receive. If a parent or grandparent wants to leave a part of their estate to a child or grandchild who is disabled and is currently receiving needs based benefits or who may be eligible to receive such benefits in the future, a Special Needs Trust should be a significant consideration as part of their estate planning.
The creation or establishment of a Special Needs Trust is an estate planning document which requires the assistance of an experienced estate planning attorney. This kind of Trust can often fail or be rejected by state or federal agencies which oversee the granting of needs based benefits if the Trust document is not prepared in accordance with the requirements for such Trusts under Washington State and Federal law. Newton Kight LLP has several attorneys who have substantial experience in drafting Special Needs Trusts either as part of a Last Will and Testament or as a stand alone Trust agreement.