Special needs trust

A special needs trust names a trustee to manage your family member's financial assets for them.

This can be a good way to manage payments for things not covered by government benefits.

Example purchases:

  • Paid staff

  • Special therapies

  • Personal items, like computers, furniture, electronics, and sports equipment

  • Recreation

  • Vacations or travel 

The trustee is legally responsible for making sure the money is invested and spent properly on your family member's personal needs. Your family member will have no control over how the money is used.

Special needs trusts can be managed without approval from the probate court.

Here's what you can do:

  1. Get help from a lawyer who is familiar with special needs trusts and the laws about disability benefits. You could also meet with a financial planner who has experience with special needs trusts.

  2. Decide what kind of trust is right for your family member. There are different kinds, which depend on the source of the money and how much money your family remember receives through certain government programs. It is critical to set up the right kind.

  3. Carefully consider who the trustee should be. It's not easy to reverse this decision. A trustee should be able to:

    • Do accounting, investments, tax returns and distributions

    • Understand various public benefits programs

    • Know your family member's needs

    • Be highly ethical and trustworthy

It is important to remember that a special needs trust should "supplement, not supplant" any government benefits your family member receives.

  • This means the money in the trust should be used in addition to any money coming in from benefits like SSI or Healthy Louisiana (Medicaid). It should not replace the money that's already coming in.

If your family member inherits money or gets compensation for an injury, you can transfer the money into a qualified special needs trust.

This is sometimes called a "payback special needs trust".

  • This ensures that the payment does not affect their ability to qualify for public benefits, like SSI or Medicaid.

  • You must file a petition and ask the probate court to approve this.

  • You will have to pay some fees.The amount will vary by parish.

We recommend getting help from a lawyer or special needs financial planner who is familiar with qualified special needs trusts.

To learn how to find a lawyer, see the section on Legal help in the menu on the left. 

 

Sources: Fletcher Tilton Attorneys at Law (2011), Jackins (2010), Mercado (2015)

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