A legal instrument that may be considered for an elderly or other individual who cannot assume responsibility for his own care is a special needs trust. State and federal provisions allow for such trusts to help the individual qualify for certain government programs. If you have a loved one who is elderly or disabled because of some special need and is unable to care for herself or himself, a Michigan probate attorney can help.
Who Qualifies for the Trust?
A special needs trust is designed specifically with those who are confined to care facilities in mind. A child whose special needs preclude living at home can qualify. An elderly individual whose assets might otherwise be eaten away in order to qualify for government programs may qualify as well.
A trustee is named to oversee the distribution of money. The special needs individual thereby loses legal ownership of his assets. Needless to say, the individual named as trustee must be someone whose personal interests in the money cannot be called into question. A Michigan probate attorney can help the family decide who is most appropriate for this position.
How Does the Trust Work?
The purpose of the trust is to “spend down,” or remove assets from ownership of the special needs person in order that he can then qualify for Social Security Supplementary Income, Social Security Disability Income, and/or Medicaid. In essence, assets are placed in a trust so that they are no longer legally owned by the elderly person.
The funds from SSI and other programs are then used by the trustee each month to pay for expenses that are covered. Special care is needed that the money is not used for non-covered items. This is often an area of some confusion for trustees, for the government is quite particular in this matter. For instance, food is covered, but not food that is thrown away. A Michigan probate attorney can help the trustee determine which expenses are payable with money received from the government.
It is important to keep in mind that moving assets out of the control of the special needs patient may in some cases have tax implications. Moreover, the use of these trusts has been gradually limited by the federal government, and one can expect that the maintenance of the trust will be scrutinized.
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