Will A Supplemental Needs Trust Affect Medicaid Eligibility?

A trust, in Westchester County, is a legal instrument that grants control over certain assets belonging to one person to a trustee, to use or distribute according to the owner’s instructions. A supplemental or “special” needs trust (SNT) is one that is created for the benefit of a disabled person, while being structured in a way so as not to affect their eligibility for government benefits. If created properly, this can act as a safety net for a disabled person – but if not structured correctly, a SNT can cause issues later on.

Trust vs SNT

A trust is a standard estate planning document for many individuals, as very often, one can avoid probate by placing one’s assets in a living trust (usually revocable, meaning that it can be amended or revoked). Avoiding probate is seen as favorable for many because the probate process can be quite complex and time-consuming, and it is infinitely preferable for beneficiaries to simply be able to collect bequests from the trust (if applicable).

A supplemental needs trust, by comparison, is specifically used to help disabled beneficiaries have access to funds without it affecting that person’s eligibility for government benefits. There are two types of disability payments – Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), and those on SSI are required to hold no more than $2,000 in “countable resources” at any one time. Given how inadequate such an amount is for most people to live on, a SNT can help to bridge the gap.

Asset Limits For The Disabled

When a person gets to an age where they may be eligible to receive long-term care, paid by Medicaid, they must qualify. Long-term care will only be covered by Medicaid if a person has limited income and assets totaling under a certain amount – for example, a single person in 2023 can have no more than $30,182 in assets, or they will not qualify for nursing home care. In theory, most disabled people will meet this threshold – particularly those on SSI, when the asset limit is so remarkably small.

That said, a trust can affect one’s eligibility for Medicaid. Generally, if a person has established a trust at any point after January 1, 2000, all or part of it will be taken into account as a ‘resource’ for the purposes of establishing eligibility. However, SNTs are explicitly excluded from this rule – meaning that even if a disabled person has access to the assets of an SNT, Medicaid will not count their value when determining eligibility for long-term care. As long as the trust is executed properly under New York law, it cannot jeopardize the beneficiary’s ability to receive long-term care.

Contact A Pleasantville Estate Planning Attorney

A SNT can be a great way to ensure that a disabled family member is provided for in the event of their caregiver’s passing. However, it must be drawn up in a way that will not jeopardize their ability to get government benefits, and a Westchester County estate planning attorney can help. Meyer & Spencer, PC has handled these matters before, and will work hard on yours. Contact our office today at (914) 741-2288 to schedule a consultation.

Source:

ssa.gov/ssi/text-resources-ussi.htm