Navigating the complexities of special needs trusts requires careful consideration of what constitutes appropriate and permissible distributions, and the inclusion of media subscriptions designed to enhance cognitive function is a question many families grapple with. A properly drafted special needs trust, also known as a supplemental needs trust, is designed to provide benefits to a disabled individual without disqualifying them from crucial government assistance programs like Supplemental Security Income (SSI) and Medicaid. These programs often have strict income and asset limitations, making careful trust administration essential. While seemingly innocuous, even seemingly small expenses like subscriptions need to be carefully evaluated to ensure they align with the trust’s purpose and don’t jeopardize eligibility for vital public benefits. Approximately 26% of Americans live with some form of disability, highlighting the increasing need for effective special needs planning tools.
What Expenses *Can* a Special Needs Trust Cover?
Generally, a special needs trust can cover expenses that supplement, rather than supplant, government benefits. This means the trust can fund things that government programs *don’t* cover, or help improve the beneficiary’s quality of life beyond the basic level of care provided by those programs. Permissible expenses often include things like: therapies not covered by insurance, recreational activities, travel, personal care items, and specialized equipment. However, the key is ensuring these expenses are *supplemental* and don’t reduce the beneficiary’s available resources in a way that would affect their eligibility for public benefits. It’s essential to remember that SSI has a specific “income deeming” process, where any income available to the beneficiary can reduce their monthly benefit. Approximately $2,000 per month is the maximum amount of income a person can receive and still qualify for SSI in 2024.
Could Media Subscriptions Qualify as “Supplemental”?
The question of whether media subscriptions designed to improve cognitive function qualify as a permissible expense is nuanced. If the subscription is demonstrably part of a therapeutic plan recommended by a healthcare professional—for example, a language learning app for someone with aphasia, or a brain training program for someone recovering from a stroke—it’s more likely to be considered a permissible expense. Documenting this professional recommendation is crucial. It’s important that these subscriptions *aren’t* simply for entertainment, but are specifically designed to address a cognitive impairment and support the beneficiary’s overall well-being. A key principle of special needs trust administration is to always prioritize the beneficiary’s health, safety, and welfare.
A Story of Careful Planning & a Missed Opportunity
Old Man Tiber, a retired carpenter, was deeply worried about his grandson, Daniel, who suffered a traumatic brain injury in a car accident. Daniel required constant care and relied heavily on SSI and Medicaid. Tiber established a special needs trust, meticulously funding it with his life savings. However, he hadn’t specifically addressed the possibility of funding cognitive therapy apps. After Tiber passed, Daniel’s mother, Sarah, discovered a fantastic program designed to help Daniel regain some language skills. She sought reimbursement from the trust, but the trustee, unfamiliar with the nuances of special needs trust administration, denied the request, fearing it would jeopardize Daniel’s benefits. Sarah, frustrated and feeling helpless, felt she was failing to provide her son with the best possible care. This highlights the importance of proactive planning and a trustee who understands the intricacies of special needs trusts.
How Proactive Planning Saved the Day
Margaret, a mother of a young adult with Down syndrome, took a different approach. She worked closely with an estate planning attorney to draft a trust that explicitly allowed for funding of “therapeutic activities and programs designed to improve cognitive function,” and she included a clause allowing the trustee to exercise discretion in determining what qualified. She documented her son’s needs and preferences in a “letter of intent” which she left with the trust documents. Years later, when her son expressed interest in a brain training app recommended by his occupational therapist, the trustee, guided by the letter of intent and the trust’s language, approved the expense without hesitation. This demonstrates the power of proactive planning and clear communication in ensuring the trust effectively supports the beneficiary’s needs.
36330 Hidden Springs Rd Suite E, Wildomar, CA 92595If you’re considering establishing a special needs trust or have questions about trust administration, it’s essential to seek legal advice from an experienced estate planning attorney. Proper planning can ensure your loved one receives the care and support they need while maintaining eligibility for crucial government benefits.
Steven F. Bliss ESQ. can help guide you through these complexities.
Contact us today at (951) 412-2800 to schedule a consultation.
Don’t leave the future of your loved one to chance – proactive estate planning can provide peace of mind and ensure they receive the care they deserve.