| I have been getting a lot of questions lately about Special Needs Trusts (SNTs). These are trusts that allow a person with disabilities, who is receiving needs-based government benefits (like Medicaid and/or SSI) to enjoy their money (or money they may inherit) without losing these benefits that require their poverty. I have been saving up these questions.
As a Long Island Special Needs Attorney, I am proud to lead the effort to educate my readers about Special Needs Trusts…so sit back and enjoy my readers’ questions and my responses.
1st Party vs 3rd Party SNTs…read on:
CLIENT QUESTION:
My son is severely autistic. I have heard a lot lately about 1st party and 3rd party special needs trusts but I do not understand which one would be better for him. Can you explain the difference?
MY RESPONSE:
YES, I CAN! 😊
Both trusts allow your son to keep his government benefits while still allowing the money in the trust to supplement what the government provides. In essence, a Special Needs Trust (also called a Supplemental Needs Trust) can pay for anything to enhance and enrich his life, except paying something that is the responsibility of the government. It supplements the government benefits.
A 1st party SNT is funded with your son’s own money and at his death the trust must provide Medicaid with reimbursement for whatever they spent on your son before anyone else can inherit.
A 3rd party SNT is funded with someone else’s money (like you leaving an inheritance for him) and Medicaid can NEVER be reimbursed. Your other family members can inherit what is left.
I do not know your son’s situation (and the source of funds) so I do not know which trust would be best for him. You will need to come in for a consultation to see which trust is most appropriate.
I hope this helps. |
