Gershberg & Associates, LLC

Attorneys and Counselors at Law

410-654-3850
  • Home
  • Who We Are
    • About Our Firm
    • Meet our Team
    • Speaker Connection
  • How We Can Help
    • Asset Protection and Business Planning
    • Estate Litigation
    • Estate Tax & Gift Figures
    • Family-Owned Businesses
    • Financial Planning Assistance
    • Immigration
    • Incapacity & Caregiver Support
    • IRA Inheritance Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid & Elder Law Planning
    • Minor Children & Young Adult Planning
    • Pet Planning
    • Trust Administration and Probate
    • SECURE ACT
    • Special Needs Planning
    • Wills and Trusts
    • Estate Planning Services
  • Elder Law
    • Are You a Caregiver?
    • Coping With Alzheimer’s
    • Emergency Medicaid and Nursing Home Planning
    • Guardianship and Conservatorship
    • Hospice Care
    • Medicaid & Elder Law Planning
    • Veterans Pension Benefits
  • Resources
    • DocuBank
    • Elder Law Resources
      • Elder Law Reports
      • Elder Law & Medicaid Definitions
    • Estate Planning Resources
      • 3 Estate Planning Questions to Answer Today
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Frequently Asked Questions
      • Estate Planning
      • Families Without an Estate Plan
      • Incapacity Planning
      • LGBTQ Estate Planning
      • Probate
      • Trust Administration and Probate
    • LGBTQ Resources
    • Probate & Trust Administration Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • The Mourner’s Bill of Rights
      • Trust Administration & Probate Definitions
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
    • Special Needs Resources
  • Blog
  • Workshops
  • Contact Us
Special Needs Trust: Do I Need One?
arrow_downward

Special Needs Trust: Do I Need One?

March 4, 2022 by Richard Gershberg

Special Needs Trust: Do I Need One?

Do you have a child or other relative who has a physical, developmental, or intellectual disability and receives or might be eligible to receive government benefits? If so, a Special Needs or Supplemental Trust (or SNT) might be appropriate.

What Type of Special Needs Trust Do I Need?

If you have a loved one with a disability or special needs it is likely they are also receiving assistance from state and/or federal programs such as Medicaid or Supplemental Security Insurance (SSI). As such, you must take great care when gifting assets to the individual or anytime the individual receives funds directly, because such could put these benefits at risk. A special needs trust is one solution to this problem. Our attorney, Richard L. Gershberg, can help you decide which type of trust is right for you and your family.

Why Is This Kind Of Trust Necessary?

As the parent or loved one of a child with special needs or person with a disability, you must take special care when estate planning because gifting or planning an inheritance of assets directly to your child or loved one could do more harm than good. Adults with special needs or disabilities often depend on state and federal assistance programs such as Medicaid, Medicare, or SSI. Those programs, however, typically have income and asset limits that recipients cannot exceed. Gifting assets to someone with a disability or special needs, therefore, can result in disqualification for many of these much-needed programs. The solution is often found in the creation of a special needs trust.

Third Party SNT

As the name implies, a third-party special needs trust is established by the third party with assets of the third party for the benefit of a person with a disability or with special needs. This type of trust is most often established by a parent, grandparent, or other family member, for the benefit of a child with special needs and uses assets of the parent or family member. This type of trust must include specific language and must be worded such that the assets in the trust are actually distributed to a third party, such as the parent as Trustee, to be used for the benefit of the individual with special needs. Because the assets held in the trust are not available to the beneficiary, those assets do not disqualify the beneficiary from eligibility for assistance programs such as Medicaid and SSI. In fact, the idea behind this type of trust, which is also referred to as a “supplemental needs” trust, is that the assets held in the trust will be used to “supplement” the benefits provided by the state and federal government.

First Party Special Needs Trust     

The other common type of special needs trust is a first party, or self-settled, special needs trust. This type of special needs trust is established using assets of the disabled individual or person with special needs.  It must be established by the parent, grandparent, guardian of the person with a disability, or by a court. Only the person with a disability can be the beneficiary of the trust.  This type of special needs trust is most frequently needed when a disabled individual receives a lump sum of money, such as the result of a settlement for injuries in a personal injury accident or an outright inheritance. The lump sum would likely disqualify the beneficiary from eligibility for assistance from Medicaid, SSI, and other state and federal assistance programs. One of the other important differences between a third part and a first party special needs trust is that with a first party trust, any assets remaining in the trust upon the death of the beneficiary must be used to pay back Medicaid. With a third-party special needs trust there is no need to worry about repaying Medicaid.

Contact Our Office Today For Assistance

For more information, or if you have additional questions or concerns about whether or not this type of trust is right for you, or about special needs planning within your estate plan, contact Richard Gershberg and his staff, the experienced Owings Mills Estate Planning and Medicaid planning attorney at Gershberg & Associates, LLC by calling 410-654-3850 to schedule an appointment.

  • Author
  • Recent Posts
Richard Gershberg
Richard Gershberg
Attorney at Gershberg & Associates, LLC
Mr. Gershberg, an active member of his community, is well aware of the growing importance of estate planning, and dedicates himself to informing the public of the need for careful attention to their specific situations.
Richard Gershberg
Latest posts by Richard Gershberg (see all)
  • What Happens When You Don’t Trust Your Trustee – Part I - March 21, 2023
  • What You Need to Know About SECURE Act 2.0 - March 14, 2023
  • The Importance of Having an Estate Plan - January 18, 2023

Gershberg & Associates, LLC

Gershberg & Associates, LLC

Search

Download Our Free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Address

Gershberg & Associates, LLC
11419 Cronridge Drive, Suite 7
Owings Mills, MD 21117-6281
Phone: (410) 654-3850
Fax: (410) 654-3880

Business Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 2:00 PM
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us
Logo
  • Email
  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

Owings Mills Estate Planning Attorney Richard L. Gershberg is proud to serve the Owings Mills, Maryland and surrounding areas.

© 2023 American Academy of Estate Planning Attorneys, Inc. All rights reserved.