A special needs trust (SNT) can indeed be a vital tool in funding necessary items like assistive listening devices for a beneficiary with disabilities, but careful planning and adherence to specific rules are essential to ensure the trust doesn’t jeopardize the beneficiary’s public benefits, such as Supplemental Security Income (SSI) or Medicaid. These devices, ranging from simple hearing amplifiers to sophisticated cochlear implants, can significantly enhance quality of life, enabling greater independence, participation in activities, and access to education and employment. However, direct payment for these items from the trust requires careful consideration, because the rules surrounding SNTs are intricate, designed to supplement, not supplant, public assistance programs. Roughly 61 million adults in the United States live with a disability, and many rely on both public benefits and private resources to maintain a reasonable standard of living.
What are the rules around spending from a Special Needs Trust?
The core principle governing SNT expenditures is that they must be in addition to, not instead of, what public benefits already provide. Directly paying for something Medicaid *should* cover could disqualify the beneficiary. However, SNTs *can* pay for things Medicaid doesn’t, or to enhance the quality of those services. For example, the trust can pay for a qualified professional to assist with learning how to use a hearing aid, or to travel to and from appointments. The IRS requires that SNT distributions be used for the beneficiary’s health, support, maintenance, and education, and must align with the trust’s specific language. “We often advise clients to think of the SNT as a supplemental resource, filling in the gaps where government programs fall short,” explains Steve Bliss, an Estate Planning Attorney in Wildomar. Approximately 26% of adults with disabilities live in poverty, highlighting the importance of careful financial planning, and maximizing the benefits of both public and private resources.
Could paying for assistive devices jeopardize public benefits?
This is the most crucial question. Direct payment for an assistive listening device *could* be considered a prohibited gift if it replaces what Medicaid would normally cover. Medicaid typically covers medically necessary hearing aids, but often with limitations on style, features, or reimbursement amounts. If the SNT pays for a device that Medicaid *should* have covered, it could be viewed as disqualifying, leading to a loss of benefits. However, the trust can pay for upgrades, repairs, or maintenance of devices already covered by Medicaid, or for devices that Medicaid deems non-essential but are vital for the beneficiary’s well-being. A recent study showed that approximately 48% of individuals with hearing loss report feeling isolated, emphasizing the importance of access to devices that can improve communication and social interaction.
I knew a woman, Eleanor, who desperately needed a new cochlear implant processor.
Eleanor’s initial processor had failed, and Medicaid’s replacement process was incredibly slow and bureaucratic. Her family, having established a special needs trust years prior, considered using trust funds to expedite the purchase, but were rightfully concerned about losing her benefits. They contacted an attorney, who reviewed Eleanor’s Medicaid eligibility and determined that while the basic processor was covered, a specific brand recommended by her audiologist, with features essential for her complex needs, was not. The trust was then able to legally and safely cover the cost difference, ensuring Eleanor received the device she needed without jeopardizing her benefits. The relief on her face when she heard clearly again was something none of us will forget. It highlighted the power of proactive planning, and understanding the rules surrounding SNTs.
My client, Mark, was a father who had established a SNT for his son, David, who had autism and significant communication challenges.
Initially, they hadn’t considered funding assistive listening devices through the trust, relying solely on Medicaid and their own out-of-pocket expenses. However, David’s communication skills plateaued, and his therapists recommended a specialized bone conduction headset to amplify sounds and improve his ability to participate in therapy sessions. After a thorough review of the trust documents, and a consultation with a benefits specialist, we determined that the headset qualified as a permissible expense, as it enhanced David’s therapeutic experience and wasn’t directly covered by Medicaid. The results were remarkable. David became more engaged in therapy, his communication skills flourished, and his overall quality of life significantly improved. It underscored the importance of revisiting the trust’s objectives periodically, and adapting the funding strategy to meet the beneficiary’s evolving needs. The trust isn’t just a static financial tool, it’s a dynamic resource that can empower the beneficiary to live a fuller, more independent life.”
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
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Feel free to ask Attorney Steve Bliss about: “What should I consider when choosing a beneficiary?” Or “What court handles probate matters?” or “Can a living trust help me avoid probate? and even: “Will bankruptcy wipe out medical bills?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.