What is a Special Needs Trust?

A Special Needs Trust is a type of trust designed to provide financial support to individuals with disabilities without jeopardizing their eligibility for government benefits. It is a legal document that allows a disabled individual to have control over how their funds are managed and spent. The trust works by allowing a third party, usually a family member or other concerned individual, to manage the trust and determine how the funds are used. In Virginia, there are different types of Special Needs Trusts available to individuals with disabilities and their families. The most common type of trust is a self-settled special needs trust, which is created by the disabled individual or their parent/guardian. This type of trust allows individuals with disabilities to set up their own trusts and own the assets in the trust. The funds in the trust are not considered the disabled individual’s assets, so they are not counted for the purposes of determining Medicaid and SSI eligibility. Another type of Special Needs Trust available in Virginia is a third-party trust. This type of trust is created by family members or other interested parties for the benefit of an individual with a disability. The trust assets are generally held in a trust account separate from the assets of the disabled individual, and the trust income can be used to supplement the disabled individual’s income without affecting eligibility for government benefits. The purpose of a Special Needs Trust is to provide supplemental financial support to a disabled individual while preserving their eligibility for government benefits. This type of trust provides an important tool for families and individuals with disabilities to ensure they are taken care of financially while still receiving needed benefits.

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What is a Special Needs Trust?

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