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Supplemental Needs Trusts for individuals with disabilities–“Third Party SNT”

March 3, 2014

This edition of the Koldin Report E-Newsletter continues a series of newsletters on the use of Supplemental Needs Trusts for individuals with disabilities. A Supplemental Needs Trust provides that income and principal may be made available to the person with disabilities but only to supplement and not to replace government benefits. Federal and State legislation expressly exempts Supplemental Needs Trusts (Special Needs Trusts) from being considered available in determining eligibility for Medicaid or other government benefits provided that the Trust contains important language required by the law. In the previous issue, we reviewed how a person with disabilities could transfer his/her own savings and certain income to a First Party Supplemental Needs Trust.

All past issues are saved on our website can be found by clicking here. In this edition, we review how you can make gifts of your assets to a Supplemental Needs Trust for the benefit of a person with disabilities. THIRD PARTY SUPPLEMENTAL NEEDS TRUST Anyone can create a Supplemental Needs Trust for the benefit of someone else. This is commonly known as a “Third Party Supplemental Needs Trust.” Unlike the First Party Supplemental Needs Trust that we discussed in the previous newsletter, a Third Party Supplemental Needs Trust does not have to designate the Medicaid Agency as the beneficiary of the Trust.

When you set up a Third Party Supplemental Needs Trust for the benefit of a person with disabilities, you can designate whoever you want to inherit any balance remaining in the Trust after the person with disabilities dies. In the past, parents and grandparents could not make gifts to their children or grandchildren who had disabilities because those children or grandchildren would lose their government benefits because they would now have savings above the eligibility limits.

Now, with a Third Party Supplemental Needs Trust, such gifts can be made to the Trust for the benefit of your child or grandchild to enjoy while you are living. With a properly designed Supplemental Needs Trust, the quality of life for a person with disabilities can be greatly enhanced. The next issue of the Koldin Report E-Newsletter will review how you can provide for your child or grandchild with disabilities in your Last Will and Testament or Living Trust by including a “Testamentary Supplemental Needs Trust” in your beneficiary clause.

The Koldin Law Center, P.C. is available to review your options regarding establishing a Supplemental Needs Trust. We are available to handle the entire Medicaid application process to successfully obtain Medicaid coverage for the person with disabilities.

E - Newsletter

Practice Areas

Basic Estate Planning

Trust Planning

Medicaid Planning And MedicaidApplications

Planning For Individuals With Disabilities

Probate And EstateAdministration