texas special needs trustIf you have a family member or loved one that is disabled they are probably eligible for or already receiving benefits from one or more government programs. Many of the government programs (Texas Medicaid being the most common) have limits to how much value a person can have in assets while still receiving benefits from the program. If your loved one ends up receiving too much property then they are at risk of losing the benefits they have as well as having their property consumed in paying back the government for the benefits it paid out.

So what do you do if your disabled loved one receives proceeds from a personal injury case, a lump sum distribution from past due Social Security benefits, or an inheritance from a family member?

The federal government has created a set of rules for a disabled individual to have their property protected in a Texas Special Needs Trust. If you can overcome these hurdles then your Texas Special Needs Trust Lawyer can help your disabled loved one protect their property rather than turning it over to the government.

Three Hurdles

The first hurdle to establishing a Texas Special Needs Trust to protect property owned by a disabled individual is that they are only authorized for individuals under age 65. If a disabled individual is 65 or older then this is not an option.

The second hurdle making first party trusts more difficult is that they must be established by a parent, grandparent, guardian or by a court. It is important to note that neither the disabled individual nor an individual acting for them through a power of attorney can create the Special Needs Trust. If a parent or grandparent is not available to create the trust, then you are looking at court involvement in the form of being appointed legal guardian for the disabled loved one or having the court create the trust itself. Both forms of judicial involvement add to the cost and time required to create the trust.

The third hurdle is that the law requires that after the disabled person’s death anything which is left in a this type of Special Needs Trust must be paid over to the State to the extent that the State has paid medical expenses for the disabled person during their lifetime. While not ideal, many families recognize this as a fair trade off for being able to preserve property to enhance their disabled loved one’s lifestyle while they are alive.

The most common use for this type of Texas Special Needs Trust is to receive and protect litigation proceeds. It is also sometimes used when a disabled person directly receives an unplanned for inheritance thereby reducing the beneficiary’s potential disqualification down to a single month and making the inheritance available for their supplemental or special needs throughout their lifetime.

Attorney Richard Shea regularly works with other attorneys, disabled persons and their families to establish First Party Special Needs Trusts to maximize the benefit a disabled person can get from their inheritance or lawsuit settlement. If you need help, contact us today.

Posted in: Special Needs Trust | Tagged , ,