Four Things You Should Know About Special Needs Trusts In Massachusetts

Do you have a child or grandchild with special needs? If so, it is important to make additional considerations for him or her as part of your estate plan. A Special Needs Trust is a very valuable estate planning tool to help families support vulnerable loved ones without inadvertently causing them the loss of means-tested beneficits, such as MassHealth. Here, our Boston- area estate planning lawyers highlight four things to know about Special Needs Trust (SNTs) in Massachusetts.

1.    Medicaid and SSI are Means-Tested Programs (Too Many Assets Undermines Eligibility) 

Many special needs people receive some form of public support—often from Medicaid (which is called MassHealth in Massachusetts) and/or SSI. As explained by Massheath, Medicaid is a strictly means-tested government program. Supplemental Security Income (SSI) is also means-tested.

Eligibility is determined based on the individual’s assets and income. In general, having countable assets above a certain threshold—just $2,000—can disqualify someone from receiving these benefits. In other words, leaving money or property, which are countable assets, directly to a special needs child or grandchild could actually render them ineligible for MassHealth or SSI.

2.    Property/Assets Within a Special Needs Trust Not Considered Countable Assets 

A Special Needs Trust (SNT) is designed to hold assets for the benefit of a person with disabilities without affecting their eligibility for means-tested programs like Medicaid or SSI. How does it work? Assets placed in an SNT are not considered countable assets for the purposes of determining eligibility.  The assets within the trust are used to supplement the needs of the beneficiary and are managed and distributed by the Trustee in accordance with the trust provisions and relevant regulations so that the trust beneficiary remains eligible for valuable benefits and services.

3.    Trust Funds Can Be Used for a Wide Range of Qualifying Purposes 

To ensure eligibility for Medicaid and SSI, the money within a Special Needs Trust must be used properly. With that being, the assets held in a SNT are not only protected but can be used for a broad range of expenses that enhance the beneficiary’s quality of life. Along with other things, this includes but is not limited to:

• Recreational equipment, games, and crafts;
• Telephone, answering machine;
• Television, radio, and cable service;
• Musical instruments;
• Automobile;
• Stereo system;
• Purchase a home, with rent paid by occupants;
• Tools for home improvements, repairs, and maintenance by the homeowner;
• Home improvements, repairs, and maintenance by outside sources;
• Audio/video equipment, computer equipment, and personal digital devices;
• Difference between a private and semi-private room in an institution;
• Household goods;
• Durable medical equipment, such as walkers, wheelchairs, and canes;
• Cleaning supplies and paper products used for cleaning;
• Recreation and entertainment;
• Non-refundable airline tickets;
• Medical insurance;
• Travel and education;
• Telephone service;
• Newspaper subscriptions;
• Tax payments;
• Furniture;
• Services of a care manager;
• Vacations;
• School tuition, books, and supplies;
• Movies;
• Installation of a burglar alarm or monitoring system in home;
• Health and life insurance premiums;
• Medical treatment for which public funds are unavailable;
• Dental care, physical therapy, massages, support services, and other medical expenses not covered by any benefit programs;
• Home care services not covered by another

Distributions from a Special Needs Trust that will reduce SSI benefits include:

• Shelter-related expenses (mortgage payments, real property taxes, heating and cooling bills, electricity, water, sewerage, garbage collection);
• Groceries or meals (until September 2024); and
• Cash for any

4.    Trustee Can Be Family Member, Friend, or Professional (Owes Fiduciary Duty) 

When establishing a Special Needs Trust, a trustee must be designated to manage the trust’s assets and ensure the beneficiary’s needs are met. The trustee can be a family member, a friend, or a professional with expertise in managing trusts. Regardless of who is chosen, the trustee has a fiduciary duty to act in the best interests of the beneficiary. A fiduciary duty requires a trustee to manage the trust’s assets prudently, ensure disbursements do not jeopardize the beneficiary’s eligibility for public benefits, and that they maintain accurate records.

Contact Our Boston, MA Special Needs Planning Attorney Today 

At Fisher Law LLC, our Boston estate planning lawyer has the experience needed to advise families on the full range of special needs planning matters, including trusts. Have specific questions about SNTs? Contact our estate planning firm now to set up your confidential initial appointment. We are proud to serve communities throughout the Greater Boston area.

Source:

mass.gov/info-details/eligibility-for-health-care-benefits-for-masshealth-the-health- safety-net-and-childrens-medical-security-plan