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How supplemental needs trusts can protect family wealth

On Behalf of | Oct 28, 2023 | Trusts |

Benefits programs like Social Security Income can help people living with disabilities and health conditions meet their basic needs and live fulfilling lives. Over 48 million people received SSI support for disabilities in 2021, according to the Social Security Administration.

However, because these programs tend to be means-tested, qualifying for benefits can be a challenge.

Special needs trusts

A supplemental needs trust allows your disabled loved one to own assets worth more than the standard limit without losing their benefits. For example, any assets you place within the trust do not affect Medicaid or SSI eligibility.

A trustee oversees the proper management and disbursement of the funds in the trust. This oversight adds a layer of financial security and ensures that the trust serves its intended purpose. Investing assets from the trust can offer economic growth that aligns with the beneficiary’s long-term needs.

Financial protections

Supplemental needs trusts shield assets from potential creditors and lawsuits. The trust’s investments do not count as the beneficiary’s own, making them inaccessible to creditors or debt collectors. This ensures uninterrupted financial support for your loved one, enhancing their quality of life.

Careful planning and clear articulation of the trust’s terms are important. The trust can include more than one beneficiary. Likewise, you can place various types of assets, from liquid investments to real estate, in the trust. Finally, all trust documents should align with government regulations to prevent any disqualification of benefits.

Supplemental needs trusts can help families allocate resources for a loved one with disabilities without limiting access to government benefits.

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