Jeff is the beneficiary of a First Party and a Third Party Special Needs Trust. His mother set up a Third Party Trust before she passed. Then when his brother passed away and left money to him, a First Party Special Needs Trust needed to be established. Both trusts allow Jeff to continue receiving his government benefits, while protecting the assets of the inheritances. His sister Jodi shares his story.
Why were the Special Needs Trusts established for Jeff?
Our mother set up the Third Party Trust with the Special Needs Trust Foundation (SNTF) to ensure that Jeff would have money to go to camp every year. Jeff had been going to camp every summer since he was about 20 years old and he always enjoyed it immensely. She set up the Special Needs Trust to ensure that Jeff was taken care of and that the burden of doing so would not fall to her other children.
The First Party Special Needs Trust was set up when our brother passed away, so that Jeff’s share of the inheritance would be used for his benefit. I was the original administrator of the trust and felt that Jeff would be best served if his trust was set up with a third party administrator so that if something happened to me, his special needs would continue to be met without disruption.
How does the Special Needs Trusts (SNT) help Jeff?
The SNT allow Jeff to travel and enjoy activities that he might otherwise not be able to participate in. He is on a fixed income and would not be able to participate in as many activities and travel if he didn’t have a trust fund. Jeff enjoys taking trips and going to amusement parks with his group of friends. Due to his special needs (he is mentally and visually handicapped) he has to travel with groups that are able to give him the extra attention that he needs. These trips can be somewhat more expensive. The SNT fund also allows Jeff to have the additional care for his dental needs. Medi-Cal is very limited as to what dental services they will pay for. Jeff is extremely sensitive to being touched and would be extremely distraught when he has deep teeth cleaning. Medi-Cal does not cover the additional sedation and cleanings that he needs each year.
What types of purchases have been made, and what is your experience with the distribution process?
Jeff has had distributions for trips and for special needs dental services. The process has always been very efficient.
What is your recommendation to families or individuals in similar situations?
I highly recommend setting up the SNT when you are doing your estate planning. It is much simpler and less expensive to set it up before you pass away. If you do not, and a person with special needs who receives government benefits inherits money, it can cause a headache for your estate administrator who is taking care of all the details after a family member passes and for the person with special needs who could loose their government benefits. Consult a reputable attorney who is experiences with the SNT and discuss it thoroughly with them.