Special Needs Trusts Attorney in New York

New York Supplemental Needs Trusts Lawyers

Special Needs Trust NY

Special Needs Trusts which are also known as, Supplemental Needs Trusts, are designed to enable a person with a disability to receive settlements from law suits, gifts and funds from other sources while not effecting his or her eligibility for medicaid or other governmental payment programs. The thrust of the trust is to separate the ownership of the trust from the person receiving the benefits of the trusts. This is done to keep the assets of the special needs individual below certain minimums set by the government. If the assets of the individual exceeds these minimums they are removed from the governmental benefit programs.

Special Needs Trusts do not provide for basic needs. They are designed to enhance the life and comfort of the individual receiving public funds by providing him or her with additional comforts or luxury items. These trusts have been known to pay for recreation activities, psychological and personal counseling, medical care and to provide educational and social benefits over and above that which is provided by government based programs. The trust can also provide computer equipment, appliances, vacations, food, medical and dental expenses and all types of other items for the beneficiary of the trust pursuant to the discretion of the trustee.

Requirements of Special Needs Trusts

When a special needs trust is created to help manage a special person’s income and/or to shelter his or her assets, the party funding the trust must set up the special needs trust in a manner that specifies the trustee cannot use the money, in the trust, in a manner which would disqualify the beneficiary from receiving public benefits available for him or her. This applies to such public benefits as Social Security Income and also to Medicaid. Special needs trust usually give the trustee extensive discretionary power with regard to how the trust and its assets are maintained. New York State has a special rule called the Prudent Investor Rule which creates a strict duty on trustees to protect the best interests of the beneficiaries of the trust.

Parents of children or adults with special needs often form these types of trusts to benefit the special needs child. Sometimes these trusts can also be set up as part of a testamentary scheme in a will.

Self-Settled Trusts

An individual who as a result of a car accident, slip and fall case, medical malpractice or product’s liability case may receive a financial settlement. The financial settlement can be placed in a self-settled special needs trusts to allow the individual to maintain his or her Medicaid or SSI eligibility.

Life Insurance Funding the Special Needs Trust

One way of funding the special needs trust is to buy a life insurance policy. The life insurance policy is tied into a testamentary scheme by a Will to provide the financial resources necessary to fund a special needs trust. There is a special type of life insurance policy called second to die life insurance that is often used to fund these types of trusts.

Medicaid and SSI Eligibility with A Special Needs Trust

If an individual is on either Medicaid or SSI the specific regulations regarding these programs must be taken into consideration. Medicaid and SSI each have specific rules regarding what assets or money the individual can have and still receive these public benefits. These programs have two “safe harbors” that allow the creation of special needs trusts. One of these is a “Pay-Back-Trust”. It is referred to as a D4A trust. This refers to the statue authorizing this type of trust. When an individual under the age of 65 receives assets in a trust from a parent or grandparent or other legal guardian it is necessary that upon the death of the beneficiary if there are proceeds remaining in the trust, those proceeds pay back the State for the medicaid benefits expended on the beneficiary’s behalf.

Pooled Trusts

The second type of trusts are called “Pooled Trusts.” They are also referred to as the 4C Trusts related to the enabling statue. These trusts gather together the funds and assets of many disabled individuals. The assets are managed by a non-for- profit organization. These types of trusts are different than individual special needs trusts which can only be created for individuals prior to their 65th birthday. Pooled-Trusts can be used for individuals at any age and also may be created by the individuals themselves. In a Pooled-Trust when the individual who is the beneficiary dies, the state does not have to be reimbursed for its medicaid expenses paid on behalf of this individual so long as the balance of the funds in the trust are maintained for other disabled individuals.

A disabled individual over the age of 65 receiving either medicaid or SSI who places money in a pooled trust incurs penalties. The special needs / supplemental needs trust lawyers at The Law Offices of Elliot S. Schlissel have extensive experience in setting up the trust. Call us for a free consultation at 1-800-344-6431.

Contact a New York Attorney Experienced in Special Needs Trusts / Supplemental Needs Trusts

Contact the Law Offices of Elliot S. Schlissel to discuss your case and our qualifications to represent you. Feel free to call toll free, any time, day or night, at 1-800-344-6431 or contact us at 718-350-2802. You can also reach us in Nassau County at 516-561-6645.

We draft special needs and supplemental needs trusts for families throughout the New York City metropolitan area, including Long Island, Nassau County, Suffolk County, Westchester County; and New York City’s five boroughs of the Bronx, Brooklyn, Manhattan, Queens, and Staten Island.

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