Special Needs Trust Attorneys – Chicago, IL

You can expect experienced legal guidance from our Special Needs Trust Attorneys at The Good Law Group. Call our Chicago, IL office now: (312) 629-1212

Special needs trusts are designed to protect the disabled beneficiary’s eligibility for needs-based public assistance programs, such as Medicaid and SSI, while providing them a safety net to pay for unexpected expenses or expenses not covered by public assistance. Sometimes referred to as Supplemental Needs Trusts, or SNTs, these trusts can be created either by the disabled person or by someone on their behalf, typically a parent or grandparent.

Why do you need a special needs trust for disabled adults? 

SSI and Medicaid are federally funded, needs-based public assistance programs that provide income and medical insurance to low-income individuals. However, each of these programs has very strict income and resource limits – earning even $1 more than the limits allow will make you ineligible for further benefits until you “spend down” the assets below those limits. Income limits vary by state, but the maximum allowable resources are $2,000 ($3,000 for married couples). It doesn’t matter whether this money is the result of selling personal items or as part of an inheritance. Any money that puts you over the resource limits makes you ineligible for benefits.

However, these benefits are insufficient to live on. In 2022 the maximum SSI benefit for an individual is $841 and Medicaid doesn’t always cover medical expenses like dental or vision.  This means that many disabled people find themselves unable to make ends meet and have no financial safety net to pay for unexpected or uncovered expenses.

These income and resource limits include any financial assistance family members may wish to provide, either during their life or by leaving a gift in their will. No matter where the money comes from, it is considered a resource and, if it exceeds the $2,000 limit, makes them ineligible for the needed assistance.

In these situations, a special needs trust can help provide financial support to the disabled adult while maintaining their eligibility for needs-based public assistance programs.

How do special needs trusts work?

Special needs trusts, sometimes referred to as SNTs, circumvent the income and resource requirements imposed by needs-based public assistance programs by holding and distributing trust assets on behalf of the disabled adult. This is different than a traditional trust, which typically distributes trust assets directly to the beneficiary. This could mean, for example, that the trustees pay the bill for a new pair of glasses directly from trust assets, rather than distributing them to the beneficiary. This could also mean paying for things to enrich the disabled beneficiary’s life, such as purchasing tickets to attend a sporting event or go on vacation. Structuring disbursements in this way prevents the trust assets from being considered a resource available to the beneficiary and puts their benefits at risk.

Special Needs Trust Terms

A special needs trust can seem scary, but that’s because they include terms not often used in everyday life. To help demystify the process, below are some of the most common terms you may hear us talk about:

• Trustor: The person who sets up the trust. For a special needs trust, this is typically a third person, such as a parent or grandparent, though in some cases it can be the disabled person.
• Trustee: The person who manages the trust, from distributions to investment decisions. The disabled beneficiary should never act as the trustee of a special needs trust created for their benefit.
• Beneficiary: The individual on whose behalf the trust was created.
• Remainder beneficiary: The person (or persons) who inherit any assets that are still in the trust at the beneficiary’s death.
• Trust estate/trust corpus: The assets the trust owns. Trusts can be funded with and own almost any asset, including cash, stocks, life insurance, and even a home.
• First-party trust: Also known as a self-settled trust, this trust is created and funded by the disabled individual, usually with the proceeds of a court settlement.
• Third-party SNT: This is a special needs trust established by a third person, such as a parent or grandparent, on behalf of the disabled individual.

What Are the Benefits of Special Needs Trusts?

Maintaining eligibility for needs-based public assistance is the primary motivation for creating a special needs trust, but it’s not the only benefit. Some others include:

• Maintain eligibility for needs-based public assistance: SNTs retain the beneficiary’s eligibility for needs-based public assistance like SSI and Medicaid by only using the trust’s assets to supplement the beneficiary’s needs, not supplant For example, trust funds would only pay for medical care and equipment not covered by Medicaid or other available health insurance.
• Prevent Medicaid payback: A third-party special needs trust prevents the trust’s assets from being used to repay Medicaid at the beneficiary’s death. First-party trusts generally are not granted that same protection, which means that any funds remaining in the trust at the beneficiary’s death will be used to reimburse Medicaid for care provided during the beneficiary’s life before it can be distributed to the remainder beneficiaries.
• Control trust distributions: A trust allows the trustor to specify the types of things the trust can and cannot pay for during the beneficiary’s life. For example, it can grant the trustees authority to make donations to charities of the beneficiary’s choosing, but not political campaigns. The trustor can also control how any assets remaining in the trust at the beneficiary’s death should be distributed, including giving the beneficiary the power to appoint them to one or more individuals or organizations.
• Avoid probate: A properly created and funded trust avoids probate, which can be a lengthy and costly process. Instead, the trust’s assets are distributed at the beneficiary’s death as outlined in the document.

Why Hire a Special Needs Trust Attorney

Special needs trusts are complicated. Don’t risk an incorrectly drafted one from eliminating your or your loved one’s eligibility for needs-based public assistance. The special needs trust attorneys at The Good Law Group have experience creating all types of special needs trusts that will ensure the beneficiary retains eligibility for needs-based public assistance programs and is properly provided for during their lifetime.

The special needs trust attorneys at The Good Law Group can guide you through your trust options and help you select the one that best meets your circumstances. Call our Chicago special needs trust lawyer at (312) 629-1212 to schedule an appointment.

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