What Are The Most Common Requests for Trust Distributions?
In order to act with the best interests of the beneficiary, a special needs trust must be very carefully administered. Knowing the best ways the trust can provide for the beneficiary's needs while not disrupting other benefit eligibility is complex, but should be a central concern for the special needs trustee. The following points discuss areas of possible trust distribution:
- It is generally not a good choice to distribute trust funds for food and shelter, as this will disrupt governmental benefits meant to cover these necessities. Occasionally the disruption will outweigh the penalty, as in the reduction of income to a beneficiary for housing who lives in the home care of his or her parents, but it is very important to consider these options with professional guidance.
- There is generally no issue with allotting trust funds toward entertainment expenditures unless food or shelter is involved, as these are basic needs accounted for by governmental benefits. If the trustee is a family member, a penalty cost may be imposed for spending on entertainment. Though there may be issue if food plays a role in the entertainment, SSA normally does not acknowledge the first $20. A small amount spent on popcorn at a movie will not create issue.
- Since vacations involve payment for both food and shelter, they can be problematic. The best option is to choose an all-inclusive option, such as cruise, where food and shelter provisions are accounted for in the general vacation fee which is paid for by the trustee. If caregivers are needed on the vacation, a trustee can pay for one individual, but if more than one caregiver is needed, documentation by a physician is important.
- The trust can pay for medical expenses not covered by Medicaid. Things such as podiatry, non-emergency dental care, glasses, hearing-aids and chiropractic services provided by state programs may be subject to cuts during budget balancing and can be accounted for through the special needs trust.
- If someone provides a good or service for or to the client, they should be paid directly. A friend or family member may pay for these items and be reimbursed by the special needs trust. Credit cards are a good option for managing these purchases.
- Insurance and ownership of a vehicle can pose a problem. Prior court approval is advised if the trust is overseen by a probate court. If a vehicle is owned by the trust, the trust can be put at risk should an accident, damage or theft occur. Generally, vehicles used by the beneficiary but under a family member's name can be a good option. Policies regarding trusts and vehicles change from region to region so investigation and creativity may be necessary to provide this.
- For beneficiaries over 65, trust disbursements are often used to cover bed-hold payments, guardianship expenses, translators, non-covered medical expenses, advocacy r additional care management and legal expenses.
- There is virtually no limit on the other expenses that can be provided for by the trust. These may include personal items, equipment, furniture, and devices that develop interest, skills, education and training for the beneficiary and support a fulfilling life.
Professional guidance by a special needs trust planning attorney is highly advised for any situation that is complex and may result in adverse affects on the beneficiary's benefits. With care and planning, most all of the beneficiary's requirements can be accounted for.
See more advice on Special Needs Trusts.