The short answer is it depends.
Supplemental Needs Trusts and Special Needs Trusts, when used properly, can be used to benefit those with disabilities by supplementing and managing their resources while maintaining their eligibility for special assistance.
If you or a loved one has a qualified disability, and you are considering a special needs trust or supplemental needs trust there are several things to consider:
First, the major difference between a Special Needs Trust and a Supplemental Needs Trust is the way that they are funded. A special Needs Trust is generally funded by the beneficiary of the trust (the person with the disability) or a spouse. In contrast, a Supplemental Needs Trust is funded by someone other than the beneficiary or a spouse or anyone obligated to the beneficiary per the terms of a settlement or judgment.
Second, the primary purpose of a Special Needs Trust and a Supplemental Needs Trust are different. With a Special Needs Trust, the beneficiary sets up the trust to protect their own assets so as to maintain them for a lifetime of use. When a person sets up a Supplemental Needs Trust the purpose is to provide for supplemental needs of a loved one and can be funded many times over the duration of the trust by eligible individuals concerned with the care of the beneficiary.
Lastly, the legal authorities governing the use of a Special Needs Trust or Supplemental Needs Trust differ, and it is important to discuss those differences with an estate planning attorney.
Drafting Supplemental Needs Trusts and Special Needs Trusts can be an important tool when caring for a loved one with a disability. The process of setting up the particular trust appropriate for your situation requires talking with an experienced estate planning attorney who will listen and discuss the wishes and concerns most important to you and your family. Contact Rochford & Langins, LLC attorney’s Peter Langins or Robert Rochford today at 507-534-3119 to discuss your unique situation.