Nonprofit Organization Administers Affordable

Special Needs Trusts

By Joanne Marcus, MSW

Executive Director, Commonwealth Community Trust (CCT)

For families providing care and financial support for loved ones living with mental illness the thought of not being there can be overwhelming and is maybe put asides to deal with the “here and now.” An individual living with a mental illness may be concerned about their ability to work or manage their finances and may need to rely on Supplemental Security Income (SSI) and Medicaid. Caregivers and individuals should know about options that will protect their financial security and not jeopardize government benefits.

              In order for an individual to qualify for SSI and Medicaid, they cannot have more than $2,000 in cash assets. But what happens when a caregiver passes away and the estate goes to the child who cannot live independently or support him or herself? What about the individual who receives an inheritance or settlement due to injury? These increased assets would cancel the government benefits. Creating a third-party special needs trust (SNT) or self-funded pooled disability trust (PDT) will protect benefits while also preserving the funds for other necessary expenses.

              An SNT is funded by a third party, usually a close family member like a parent or grandparent and is coordinated with the family’s estate plan. The SNT holds money that the grantor leaves for the beneficiary’s benefit and can be used, for example, to purchase a wheel chair, dental services, eye glasses, hearing aids, education, recreation, travel, transportation, furniture and clothing. The PDT is self-funded by the beneficiary, generally through a personal-injury award or inheritance and can be used for the same types of expenditures.