Nevada families of mentally ill or disabled individuals may wish to learn about special needs trusts. This type of trust is designed specifically for individuals who may be unable to care for themselves. A family member usually manages the trust for the beneficiary.
A special needs trust differs from other trusts in that it is structured with the special needs and situation of the beneficiary in mind. Many disabled individuals receive such government assistance as subsidized housing, Supplemental Security Income, vocational help or Medicaid. Such programs have eligibility requirements that the individual must meet. Financial means is one requirement and, if the individual inherits assets, they may not qualify or cease to qualify if they already receive assistance.
The use of a trust allows a disabled or mentally ill individual to inherit assets without stripping them of government funding. When financial qualification for government funding is calculated, the trust is put aside since the trust is not controlled by the beneficiary but is managed by the trustee. In addition, if the disabled individual is awarded money in a lawsuit, that may also be placed in the trust. Conversely, the assets in the trust fund are protected if a lawsuit is filed against the beneficiary.
The trustee is able to provide the beneficiary with things he or she may need, such as items for the home, medical expenses, vehicles, educational items or school and physical therapy. If the beneficiary was able to draw money out of the trust and purchase such items, it might be construed as financial capability that would hamper government benefits.
The wording used to establish a special needs trust is specific, and certain explanations are needed. It may be beneficial to have the assistance of an attorney experienced in estate planning to set up the trust.
Source: Findlaw, “What are the benefits of special needs trusts?“, December 12, 2014