- People with disabilities face many financial barriers in the United States, and long-term help can be hard to come by.
- There is a trust that can help them qualify for state assistance and keep some assets for other expenses.
- Additional needs trusts can also help caregivers pay for their own health care expenses as they age.
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There are many financial barriers for people with disabilities and their families. Accessing programs such as Supplemental Security Income (SSI) or Medicaid usually only comes with “asset testing,” which is when your assets are counted by the state to determine if you are eligible for certain programs.
Managing the rising health care costs that come with disability while simultaneously being subject to these asset limits can seem impossible. But there is one tool that people with disabilities and their families can use to their advantage: an added need for trust.
A way to provide for your loved ones with disabilities without losing government benefits
In the case of SSI and Medicaid, if a disabled person has more than $2,000 to their name, they will often not be eligible for assistance.
However, there is a loophole to this which involves the disabled person’s carers. If the assets are held in an Additional Needs Trust (SNT), those assets are immune from the test.
“These trusts are intended to cover additional expenses [of caring for your disabled loved one] who are not covered by SSI or Medicaid,” says Jillian Zacks, Esq. by McAndrews, Mehalick, Connolly, Hulse and Ryan, PC
She cites examples of eligible expenses such as clothing, computers or other technology, furniture, vacations and medical expenses not covered by insurance. However, Zacks points out that you can’t use an SNT to pay for food and lodging without jeopardizing SSI benefits.
Protect your home and assets from clawbacks
Ideally, the SNT will be set up as a third-party trust and these assets will never have been in the name of the disabled person. If there is a first-party trust, meaning the assets have been in the disabled person’s name at one time, the state may claim a portion of those funds after the disabled person’s death in order to “repay the state for all the Medicaid services they received during their lifetime, according to Zacks.
This “estate collection program” can apply to most property you leave behind, including your home.
If the caretaker dies first, he may bequeath his home to the disabled person, but after the disabled person dies, he may again be subject to similar provisions for the recovery of the estate.
However, if the home is left to the disabled person under a third-party SNT, not only is it protected for life, but it will also be shielded from Medicaid clawback provisions after death. which will allow you to leave the house to another beneficiary rather than having the property revert to the state.
Caregivers can also use their child’s SNT for their own healthcare expenses
As parents of children with disabilities approach their golden years, they may also find themselves in need of long-term care and facing restrictive asset limits while trying to qualify for government assistance. ‘State.
Although caregivers may not be eligible for an SNT themselves, their child will be under the age of 65, and in these situations, the caregiver can allocate their assets to their child’s SNT, which would house the assets and help them to qualify for the help they need.
However, families wishing to pursue either option should seek professional help before attempting to do so.
“This planning is nuanced and complicated,” Zacks said. “We always recommend consulting an attorney who specializes in elder care.”