What Kind of Expenses Can a Special Needs Trust Cover?

People with serious disabilities often need additional financial resources to support and enhance their quality of life. Fortunately, both the State of Ohio and the federal government provide means-tested benefits to support low-income individuals with disabilities. However, these benefits often fall short in meeting all their needs.

A special needs trust can provide much-needed financial assistance without jeopardizing eligibility for public assistance. Here’s a brief explanation of special needs trusts and the expenses they can cover.

Understanding special needs trusts

A special needs trust is an estate planning tool designed to allow beneficiaries to access supplemental financial resources, while still maintaining eligibility for needs-based public assistance. The money in the trust isn’t counted as part of their assets, since it’s held in trust.

However, it’s important to remember that the trust cannot be used to cover the same expenses traditionally provided by public benefits: doing so could result in the loss of those benefits.

Approved special needs trust expenses

While basic needs such as food, housing and basic medical care are typically covered by public benefits, a special needs trust can help with a range of other expenses to improve the beneficiary’s quality of life. Some examples include:

  • Uncovered medical, dental or psychiatric care: This type of trust can help fund medical treatments, therapies, dental care, mental health services or alternative treatments not covered by public benefits.
  • Medical devices: You can use a special needs trust to buy necessary equipment like wheelchairs, ramps, hearing aids or prosthetic devices.
  • Transportation: A special needs trust can provide for transportation options, such as purchasing a vehicle or covering the costs of public transportation passes.
  • Education and training: A special needs trust may also provide financial support for educational programs, vocational training, specialized courses or learning experiences to enhance skills and personal development.
  • Recreation and hobbies: Finally, these trusts may fund activities, sports, hobbies and recreational equipment that provide for the beneficiary’s enjoyment and social engagement.

By establishing a special needs trust, you can help your loved one have a better life, beyond what public assistance benefits alone will provide. Accessing the funds for permissible expenses can enhance a loved one’s overall well-being, personal growth and enjoyment of life.

As long as you adhere to the guidelines and ensure that the trust funds are used for permissible expenses, you’ll rest assured that your loved one is well provided for, even after your passing.

To establish a special needs trust to support your loved one’s specific situation, or learn more about other estate planning options, contact James Bart Leonardi, LLC today.

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