“My youngest child has “XXX” (physical, mental, substance abuse issues). Why don’t we simply leave his share to our other son–he’ll take care of him”?
Trust for Disabled Person – Do they really work?
I’m Attorney Tom Mullen of Quincy Mass. and this blog is only going to discuss the trust that takes effect when you die. We call this a testamentary trust. In a later blog we will discuss the trust which takes effect or is funded, if you will, with proceeds of a
personal injury action or worker’s compensation award. The type of trust we are discussing is written now while you are alive, but the money funds the trust only when you die. The money “pours-over” from your will to the trust. The will itself is naturally enough called a “pour-over”will.
Trusts for disabled persons work–some disability attorneys call is a “Special” Needs Trust–other disability attorneys call it a “Supplemental” Needs Trust. They both are exactly the same. They are trusts for disabled persons. In this blog we are not going to discuss what is a Trust, Grantor, Trustee or Beneficiary. We’ll do that in a later blog.
A trust for your disabled child which is only activated when you die (a testamentary trust) is called a Third Party Trust. It is not “set-up” by your son. It is not “managed” by your son. It is set-up and managed for your son. Let’s stop here for a minute. Today, we are also not going to discuss Supplemental Security Income (SSI) or Social Security Disability Income(SSDI). That will come in a future blog. But it is important to understand the difference, as the difference will affect the way your trust works.
Your child (age doesn’t matter–my 34 year old Kevin the former hockey player is still my baby) certainly knows whether he is receiving MassHealth, SSI, or SSDI. Since your money is not your child’s money, your disability attorney can craft your Special Needs Trust in order that your child can benefit from the Medicaid laws and receive his inheritance.
These Trusts are not created by loopholes. Rather, our Congress designed these Medicaid laws to allow our disabled population to have more dignity and retain both their MassHealth and SSI. Here’s the Supplemental Needs Trust magic language:
“I leave one third of my estate to my son Kevin, in trust never to be used is such a way as to disqualify him for Medicaid or SSI.”Of course you know the language is more complicated than that–but that’s enough now for
Special Needs Trust 101
Since it’s not “his” money–it’s “your” money–you can say anything you want in the trust as long as it doesn’t disqualify him for his public benefits or is against public policy. For instance, you can’t say he is disinherited if he becomes a New York Yankee fan–even though that might be a good reason to disinherit him!
So, remember this Supplemental Needs Trust is activated only at your death. Lastly, when you see your experienced disability attorney be sure you have a Trustee in mind. Someone you “trust.” It can’t be your son receiving the money. It does have to be someone not only with a good business sense, but also someone who can resist any unreasonable money demands from your disabled child. Remember this is just a generalization and everyone’s needs are different.
If you have a disabled child please call Attorney Thomas R. Mullen for a consultation.
