Logo-Website-Header-mediumLogo-Website-Header-mediumLogo-Website-Header-mediumLogo-Website-Header-medium
  • Home
  • Practice Areas
    • Estate Planning
      • Advance Healthcare Directive (AHCD)
      • Power of Attorney (POA)
      • Last Will & Testament
      • Maryland Medical Orders for Life-Sustaining Treatment (MOLST)
      • Trusts
    • Probate
    • Elder Law
    • Medicaid Applications and Planning
    • Asset Preservation
    • Guardianship
    • Fiduciary Representation
    • Business/Succession Planning
  • About
    • Richard K. Abraham, Esquire
    • Susan Affleck Bauer, Esquire
    • Patrick Hanley Jr., Esquire
    • Why Plan Ahead?
    • Events & Media Appearances
  • Testimonials
  • Articles
  • Contact
    • Directions
✕
Other New Tax Provisions
January 6, 2019
Paying Medicare Online
January 10, 2019
Published by Richard K. Abraham, Esquire on January 6, 2019
Categories
  • Estate Planning
Tags
  • Asset Preservation
  • Beneficiary
  • Disability
  • Estate Plan
  • Estate Planning
  • Medicare
  • Special Needs Trust
  • Supplemental Needs Trust
  • Trusts

If a disabled person under the age of 65 receives Social Security or other government benefits they cannot own assets with a total value over $2,000.

Events such as lawsuit settlements and inheritances can often put a person’s benefits at risk.

To allow for the continuation of government-provided benefits, and the utilization of all available funds for care, many states have passed legislation that allows for the creation of Special and Supplemental Needs Trusts.


Special Needs Trust

There are two main differences between these trusts. The disabled person themselves funds a Special Needs Trust and once they die, the remaining funds are used to reimburse the State for any medical expenses incurred on the deceased’s behalf before being distributed.


Supplemental Needs Trust

Comparatively, a Supplemental Needs Trust is funded by assets belonging to others such as a spouse, parent, or grandparent and is distributed along guidelines set by those funding it. Supplemental Needs Trusts are frequently established in a parent’s will. This method of creation in funding is called Testamentary Supplemental Needs Trust.

However, once established both types of trust serve very similar purposes and work in very similar ways.

These trusts are designed to “supplement” but not replace benefits provided by the government.

They exist to fund the reasonable living expenses of a disabled person and fill in the gaps left by government benefits. The government will not pay for a disabled person to go to the movies, eat at a restaurant, or continue to provide benefits if standard medical or other treatments are being privately funded.

But, a properly planned trust would allow a disabled person to provide for their own basic needs, entertainment, and costs of living, while still receiving government aid.

For example, Medicare does not pay for eyeglasses or clothing. These and other needs can be provided for under a Special or Supplemental Needs Trust.

Understanding Supplemental and Special Needs Trusts is the first step to ensuring future financial stability for any loved ones receiving disability benefits from the government.

Retitling assets in the name of a Trust, or naming the Trust set up for a loved one as a beneficiary will allow a person to continue to receive any due benefits and whatever assets to which they are entitled.

For help planning your or a loved one’s future, contact Abraham & Bauer.

Planning Ahead is a Gift to Your Loved Ones!

Richard K. Abraham, Esquire
Richard K. Abraham, Esquire

Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.

He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.

Schedule a consultation to help you and your loved ones.

Share
0
Richard K. Abraham, Esquire
Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation. He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City. Schedule a consultation to help you and your loved ones.

Related posts

April 16, 2020

Reasons to Create an Estate Plan Now vs. Later


Read more
March 14, 2020

Having the Talk: Share Your Estate Plan With Your Family


Read more
February 10, 2020

Estate Planning for Your Minor Children


Read more
If you are communicating with regard to a CONSUMER DEBT, please be advised of the following: This is an attempt to collect a debt. Any information received shall be used for that purpose. This is a communication with a debt collector. If you are a debtor in a pending bankruptcy case or have been discharged from the debt, this communication is not intended to be an attempt to collect a debt and/or violate any current stay of proceedings. Please also note: when communicating through email, if persons other than you have access to your email address, it may be possible for them to view messages. If you have either provided an email address or stated you want to communicate through email with this office, you may opt out at any time by sending a message to this address stating you no longer want to communicate by email. We do not communicate through any form of social media regarding any consumer debt.
All Rights Reserved © 2015-2023

Abraham & Bauer, LLC
909 Ridgebrook Road
Suite 212
Sparks, MD 21152
443-901-1333
  • COVID-19 Update »