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Allowable Expenses for a Special Needs Trust

Special needs trust is shown on a photo using the text

Special needs trusts (SNTs), also called supplemental needs trusts, can be an exceptionally useful tool for providing supplemental income to a loved one with a disability. An SNT allows you to disburse regular funds to a person without affecting the beneficiary’s eligibility for needs-based governmental programs such as Medicaid and Supplemental Security Income (SSI). SNTs must follow certain guidelines, however, including the proper use of disbursedfunds. Continue reading for a discussion of the types of expenses that a special needs trust may be used to cover. For seasoned advice on planning your estate, call a dedicatedPortland and Vancouver estate planning attorney.

Special Needs Trusts are for the Extras, Not Basic Needs

Special needs trusts are meant to help beneficiaries by paying for items that governmental assistance does not already cover. SNTs are not meant to cover those same items. Governmental assistance covers basics such as the recipient’s food, shelter, water, and electricity. SNT funds can, technically, be used for the purchase of those basic items, but doing so could negatively affect the beneficiary’s governmental benefits–for example, the government may reduce the beneficiary’s SSI by the amount of SNT funds used to cover the same items.

SNTs are specifically meant to cover the “extras.” Items that may be paid for with SNT funds without affecting governmental benefits include things like:

  • Medication or medical equipment not already covered by Medicaid or Medicare
  • Job coaching and training
  • Tuition for school or other programs
  • Telephone service and internet access
  • Personal assistance
  • Clothing
  • One vehicle
  • Computer equipment
  • Accounting or legal services
  • Elective surgeries
  • Furniture
  • Home renovations to make the home more accessible
  • Vehicle maintenance
  • Public transportation or rideshare costs
  • Tickets to recreational events
  • Repair services
  • Pets and pet supplies
  • Musical instruments
  • And many more

The above list is not meant to be comprehensive, but rather illustrative of the wide range of items that SNT funds can be used to cover. The list of items the SNT cannot cover without affecting eligibility for benefits from governmental programs is much shorter: food and shelter expenses such as rent, property tax, power, and garbage removal. Expenses relating to recreational activities, career advancement, travel, fitness, or other life activities may be freely covered using SNT funds.

If you wish to set up a special needs trust for a loved one and you are concerned about whether certain expenses can be covered, talk to an experienced estate planning and special needs planning attorney. Your attorney can walk you through specific items, advise you on whether the SNT can freely cover those items, and work to ensure you or your loved one receives the maximum additional assistance without affecting governmental benefits.

Call Vancouver Attorney John Lutgens for Help Planning Your Estate in Oregon or Washington State

For comprehensive and effective assistance with estate planning in Portland, Vancouver, or elsewhere throughout Oregon and Washington, contact Vancouver asset protection lawyer John Lutgens for a no-cost consultation at 360-693-2119.

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