A special needs trust is designed for the benefit of physically challenged or mentally ill beneficiaries to hold properties for their welfare, use and enjoyment. In case the countable assets including such trust properties of any married disabled beneficiary is greater than $ 3000 and unmarried disabled is higher than $2000, the concerned person usually becomes disqualified for Medicaid. However, such trusts may on observance of specified conditions be able to avoid the undesirable consequence of the beneficiary loosing eligibility to government benefits. These trusts are also used to provide for health care and nursing home benefits under the state sponsored Medicaid program.
Special needs trust are often used to accept the proceeds of inheritance or personal injury settlement on behalf of the disabled individual. The corpus of these trusts is often funded by proceeds of litigation, insurance settlement, compensation for injury etc.
Usually the family members and well wishers of the disabled person serve as trustees of such trust. The Court also may appoint or replace the trustees.
Special needs trust is instituted under the guidance of multidisciplinary team consisting of structured settlement planner, financial advisor and other experts
(More http://en.wikipedia.org/wiki/Special_needs_trust
http://en.wikipedia.org/wiki/Supplemental_Needs_Trust )
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