(865) 588-3700 • Monica J. Franklin is a Certified Elder Law Attorney by the National Elder Law Foundation, the ABA approved entity for certifying attorneys as Specialists in Elder Law. info@monicafranklinelderlaw.com

SPECIAL NEEDS TRUSTS

Special Needs Trust

Special needs trusts are a wonderful tool to provide for a disabled person who currently receives or may later receive Medicaid or TennCare benefits. When a special needs trust is properly created and funded, the disabled person can continue to receive government benefits that are means tested such as Supplemental Security Income (SSI) and TennCare Medicaid benefits. The funds in the special needs trust are used to provide for the disabled person’s “supplemental needs.” There are certain restrictions on the use of the funds, especially when a person receives Social Security Supplemental Income also known as “SSI”.

A special needs trust may be a “self-settled special needs trust” or a “first party special needs trust.” A self-settled special needs trust is a trust funded with the disabled person’s personal funds (usually a windfall from a personal injury suit or an inheritance). There are certain strict statutory requirements for when and who can create this type of trust. A self-settled special needs trust must contain a payback provision. Thus, when the beneficiary dies, any funds remaining in the first party special needs trust must be used to first pay back the Medicaid system before the funds are distributed to family members.

A third party special needs trust is established by a person (Trustor) in his/her will, living revocable trust, or as a stand-alone trust for the benefit of a disabled person. This trust does NOT contain a payback provision. This trust is used to provide for the disabled person’s needs, which are not met by the government benefits, and there are certain restrictions. When the beneficiary dies, the funds remaining in the trust are distributed according to the Trustor’s wishes.

To learn more about Special Needs Trusts, please download our booklet below: “10 FAQs About Special Needs Trusts”. This booklet provides a thorough explanation of the types of Special Needs Trusts, and real life examples of how Special Needs Trusts have benefited a disabled person and families.

For more information about trusts in general, click here.

 

  • % OF POP AGE 5+ WITH SOME TYPE OF DISABILITY 15%
  • % OF SPECIAL NEEDS ADULTS WITHOUT EMPLOYMENT 75%
  • % HH WITH BOTH ADULTS & CHILDREN WITH A DISABILITY 5.5%

 

One person caring about another represents life’s greatest value.

~ Jim Rohn

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