Special Needs TrustsJames Witherspoon
October 18, 2010 — 1,259 views
When a person wants to set up a trust that benefits a person who, without additional help, may not be physically or mentally capable of handling the funds under their possession, the law provides several options to plausibly allow for these transfers of property. Known as a special needs trust or, namely in American law, a supplemental needs trust, certain legal structures permit special types of trusts to give money or property to mentally or physically disabled individuals without interrupting their Medicaid support.
One of the most problematic parts of awarding a legacy to an individual who needs the benefits of Medicaid is that the threshold for long-term nursing programs is very low. The reason behind this low threshold is to keep Medicaid expenses lower and prevent those who do not absolutely need the assistance from cashing in on the federal program. Thus, special trusts allow for those recipients who are disabled to receive their due inheritance while not breaching Medicaid asset limits.
Prior to a law passed in 1993 known as the Omnibus Budget Reconciliation Act, there were more options available to retain Medicaid benefits while receiving funds from a trust. However, in the modern legal landscape, such legal possibilities are largely closed.
The simplest form of a special needs trust in America is called a disabled individual's trust. These trusts have a few basic requirements in order to keep certain beneficiaries from abusing the Medicaid asset limits. There is an initial age limit, which excludes all those receiving funds above the age of 65 years from using this type of trust. Additionally, these individuals must notably be classified as disabled under the standards of Social Security. Finally, these trusts often include what is known as a payback provision, which requires the cost of that Medicaid care to be reimbursed.
To learn more about your trust options, contact an estate planning attorney.
For help with the future of your estate, contact the Houston estate planning attorneys of Garg & Associates, P.C. today.
Article Source: http://EzineArticles.com/?expert=James_Witherspoon