What Can a Special Needs Trust Pay For in Texas?
December 2, 2024
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Special needs trusts (SNTs) are powerful financial tools designed to enhance the lives of people with disabilities. They do so without jeopardizing their eligibility for vital government benefits like Medicaid and Supplemental Security Income (SSI).
SNTs do have restrictions on how the funds can be used, though. You may have questions such as, “What can a special needs trust pay for?” In Texas, an SNT can pay for many expenses not covered by standard benefits programs, greatly improving the trust beneficiary’s quality of life.
Today, discover the purpose and function of a Special Needs Trust, which type of trust may be best for your loved one, and what expenses and costs can be covered with the help of an SNT.
Also, learn how our experienced Wealth Management team can coordinate with your attorney to find the best solution for your child’s needs, provide access to different types of trusts, or even serve as a corporate trustee.
How a Special Needs Trust Can Help
For a person with a disability, Medicaid and SSI are intended to provide for basic needs such as medical care, food, clothing, and shelter. Eligibility for these essential services and programs is needs-based, meaning that an individual whose resources exceed a fixed limit may be prohibited from receiving benefits.
A supplemental needs trust is specifically designed to pay for items and services that go beyond the essentials that government benefits cover, but without jeopardizing SSI and Medicaid eligibility.
The funds from an SNT can help ensure that a person with a disability has the highest quality of life possible and can have their immediate and long-term needs met, giving family members more peace of mind.
What Can a Special Needs Trust Pay For: Common Expenses Covered by an SNT
A well-managed SNT can fund various services and items that help improve the beneficiary’s day-to-day comfort, independence, and enjoyment. Here’s a closer look at what costs these trusts are able to cover:
- Medical Care and Therapy: SNTs can cover additional medical needs not fully met by Medicaid, such as specialized therapies, dental work, and certain rehabilitative services.
- Equipment and Mobility Aids: These funds can pay for electronic equipment (like computers or tablets), assistive technology, and specially equipped vans, all of which help a person with disabilities navigate daily life more easily.
- Educational Activities: Whether it’s vocational training, hobby classes, or other types of educational courses, the SNT can pay for experiences that support the beneficiary’s personal development and enjoyment.
- Personal and Home-Related Expenses: SNTs may cover items such as home modifications for accessibility, furnishings, or services from companions and caregivers. These expenses provide additional comfort and stability without jeopardizing Medicaid or SSI eligibility.
- Transportation and Leisure: Travel, entertainment, and recreation costs such as summer camps, movie tickets, and sports activities may also be covered by SNT funds. It would also cover any additional transportation costs for bus, subway, or ride-share trips.
To avoid impacting public benefits, certain expenses cannot be paid for with an SNT. Examples include basic food, clothing, rent, or utilities, which SSI and Medicaid are intended to cover, or direct cash payments, which could count as “unearned income” under SSI rules and jeopardize benefit eligibility.
Texas Gulf Bank: Offering SNT Guidance and Expertise That Families Need
Navigating the complexities of special needs trusts requires in-depth experience and a clear understanding of trust documentation. At Texas Gulf Bank, our experienced Wealth Management team will work with you and your attorney to identify the best trust solution for future needs and provide long-term solutions for asset management.
In addition, our Wealth Management Department can serve as Executor or Co-executor for the trustee’s estate or assist when an impartial third party is needed to help settle or probate an estate.
No matter your needs, we are ready to provide reliable guidance to your family in managing special needs trusts. We look forward to partnering with you to design and implement strategies to help secure your child’s future.
– If you want to learn more about what a special needs trust can pay for, our Wealth Management team is here to help. Contact us to learn more about how we can support your family’s needs, establish an SNT, and protect your loved one’s future.
Consult your tax advisor about how a Special Needs Trust might benefit you or your loved one, depending on your particular circumstances.