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What can you pay for out of a special needs trust?

On Behalf of | Dec 14, 2022 | Estate Planning |

If you have a disabled adult child with special needs who is on Supplemental Security Income (SSI) and Medicaid, estate planning can be complicated.

You may already know that you can include them in your estate plans and provide for their future – without interfering with their benefit entitlements – through a special needs trust. Do you know, however, how the money in the trust can be used?

Understanding more about how special needs trusts work (and making sure that your chosen trustee also understands) can help your child get the most out of the assets you’re leaving behind.

Special needs trusts can pay for things public benefit program will not

Public benefits, like SSI, only cover the bare basics that someone needs to survive – and nothing else. The trustee is barred from giving your heir cash, as that would count as income for SSI purposes and potentially end their entitlement entirely. They also cannot use the trust to pay for your child’s monthly rent or utilities directly without a penalty that will affect the amount of benefits your child receives.

So, how can the money be spent? Typically, special needs trusts are used for “extras” like:

  • A smartphone and cellular service
  • A computer or tablet and internet service
  • Video games and gaming equipment
  • Medical, vision and dental services that aren’t already covered
  • Special durable medical equipment
  • Physical therapy or rehab
  • Educational programs and camps
  • Art classes and other enrichment programs
  • Hobby supplies and books
  • Appliances and television sets
  • Vehicle maintenance and repairs
  • A bus pass, ride hailing services or travel expenses
  • Companion services
  • Insurance and burial expenses
  • Vacations and retreats
  • Furniture, including adaptive chairs

In short, the money left in a special needs trust can be used to enhance your child’s quality of life so that they can enjoy things in a way that their benefits alone would never allow.

The more you know, the more decisive you can be about your options. Get some experienced legal guidance as you plan your estate and set up a special needs trust for your child’s future.