A Special Needs Trust (SNT), also known as a Supplemental Needs Trust, is a financial instrument designed to improve the quality of life for physically or mentally disabled, or chronically ill individuals by supplementing the government benefits available to them.

The assets held in Special Needs Trusts are not considered when determining whether an individual is eligible for the means-tested public programs such as:

• Medicare

• Medicaid

• Social Security

• Supplementary Security Income (SSI)

When personal circumstances change, sometimes it makes sense to update a SNT. In the fiduciary relationship, a person acts on behalf of another person or individuals to manage their assets.

Benefits Of A Special Needs Trust

Creating a SNT can be beneficial for both parties:

• The beneficiary has a way of receiving financial assistance without putting their eligibility for income-restricted programs or services at risk.

• While the person or party who creates the trust has the reassurance that the proceeds they stipulate will go to expenses.

How Does A Special Needs Trust Work?

A Special Needs Trust covers the percentage of an individual's financial needs that public assistance payments do not cover. Assets held in Special Needs Trusts do not count for qualifying public assistance unless they are used for specific food or shelter expenses.

The proceeds of SNT are often used for:

• Medical expenses

• Transportation costs

• Payments for caretakers



• Other permitted expenses

Top 5 Reasons Why You Need To Amend SNT

It is a wise idea to examine a Special Needs Trust by yourself each year. In general, you do not need to amend your SNT unless the beneficiary or you experienced significant changes in your personal circumstances.

Here are the top five reasons why you should amend your Special Needs Trust:

• Family Changes:
  Since the Special Needs Trust was created, births, deaths, and marriages may be reasons to change your asset allocation to the trust.

• ABLE Accounts:
  They can be a great complement to a Special Needs Trust. The funds held in the ABLE accounts, as with SNT, are not considered when determining whether you are eligible for the mean-based government benefits. The beneficiary can manage these accounts, but there are strict requirements for using them. You can create a plan to distribute SNT funds to an ABLE account periodically.

• Beneficiary's Situation:
  Suppose the health of your family member changed, their public benefits significantly changed, or they have new living arrangements like moving to another state. In that case, any of these circumstances can trigger the need to amend the Special Needs Trust. Now, they may have additional needs for support, while SNT regulations and government benefits can differ in a new state.

• Financial Circumstances:
  Unanticipated expenditures, a new job, stock market volatility, and more can change your personal finances. You might want to review which assets should be held by the trust. You may also want to revise the trust language or an accompanying letter of intent regarding priorities the trustee should consider when making distributions on behalf of the beneficiary.

• Trustees And Advisory Committee Members:
  People that were once appropriate advocates for your child with special needs may no longer be a good fit for this responsibility.
  

Consclusion

First-party Special Needs Trusts, which are funded with the beneficiary's own resources, are irrevocable and therefore cannot be revised. However, a third-party SNT that holds funds from someone other than the beneficiary may be structured to be revocable so they can be altered.

Third-party Special Needs Trust should not be considered a static document. The trust is a blueprint for the financial security of the beneficiary. It is necessary to keep it up to date to be for its long-term effectiveness.

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