|
|
Last
Modified on
Jun 01, 2026
If you have a loved one with special needs or you have special needs yourself, it’s important to take unique precautions that can protect your assets and benefits in ways that you may not have considered. Having the right kind of ongoing asset protection can be especially necessary if you or a loved one has special needs. You don’t want to lose your government benefits because you didn’t structure your estate plan correctly. A lawyer can help devise a Florida special needs trust.
Having the right kind of legal help to assist you in developing your trust is crucial. Special needs trust cases can easily become complicated to navigate if you don’t know what you’re doing. A Florida special needs trust attorney can assist you in understanding how the state’s special needs trust laws work. Douglas A. Oberdorfer has decades of experience helping clients work out their estate planning needs, including developing special needs trusts. He can help you, too.
Types of Special Needs Trusts
A special needs trust gives individuals with disabilities the opportunity to secure their assets while continuing to maintain their government benefits, including Medicaid and Supplemental Security Income (SSI). A special needs trust is one of many different kinds of trusts you can put together in Florida. Trusts are common in the state, considering the median household income is $74,568, and the median property value is $416,800. Here are the different types of special needs trusts:
- First-party SNT: This type of SNT is funded with the beneficiary’s own assets, which often include an inheritance, social security back pay, or a personal injury settlement. If you establish a first-party SNT, you will be required to include a Medicaid payback provision, which means the state will be reimbursed for medical assistance from the funds that remain at the time of death if the beneficiary is under 65 years old.
- Third-party SNT: This type of SNT is funded using somebody else’s money, such as the beneficiary’s parents or grandparents. Since the assets in the trust never technically belonged to the beneficiary, they will not be required to include a Medicaid payback provision.
- Pooled trust: A pooled trust is managed by a nonprofit organization that takes funds from multiple families and pools them into individual sub-accounts. A pooled trust can be a cost-effective alternative if you have a smaller estate or lack a designated trustee.
Requirements for a Special Needs Trust
If you want to establish a special needs trust in Florida, you have to meet certain requirements. If any of these requirements are not met, your trust may not be considered valid. Here are the necessary requirements for a special needs trust in Florida:
- Beneficiary status: To have a special needs trust in your name, your condition must meet the legal definition of a disability set forth by the Social Security Administration (SSA). That means your condition must be a medically determinable physical or mental impairment that prevents you from holding gainful employment and must last at least 12 months or result in your death.
- Sole benefit: The trust must be established solely for the benefit of the disabled individual.
- Distribution: Funds cannot be distributed directly to the beneficiary and cannot be used for non-medical needs without incurring penalties or reducing benefits.
- Trustee: You must appoint a trustee to manage the funds.
Cost & Planning
A special needs trust can be costly when you consider attorney fees, annual trustee fees, tax preparation, and management fees. However, the long-term benefits of a special needs trust may outweigh the initial costs. The beneficiary can use the trust to pay for their medical needs while continuing to receive government benefits. Without the trust, the money itself will likely affect their benefits.
FAQs
What Are the Downsides of a Special Needs Trust?
While a special needs trust can be greatly beneficial, it is not without its downsides. If your trust is funded by your own money, the state requires a Medicaid payback provision upon your death. The beneficiary also has little to no control over the distribution of funds in the trust. That power lies solely with the trustee. The beneficiary also can’t spend the money on anything but medical necessities without incurring penalties.
What Can a Special Needs Trust Pay for in Florida?
In Florida, a special needs trust can only be used for supplemental services and goods that improve the beneficiary’s quality of life without reducing their eligibility for government benefits. The most common expenses that an SNT pays for in Florida are medical needs, transportation, technology and furnishings, education, recreation, and daily living needs. Any unnecessary extras may incur penalties.
What Are Some Common SNT Mistakes to Avoid?
The most common mistake to avoid when putting together a special needs trust is leaving your money directly to your loved one instead of putting it in an SNT. You should not directly name a special needs individual in your will or life insurance. While they will inherit the money, the sudden change in income can affect their ability to receive government benefits. By leaving the money in an SNT, their benefits won’t be affected.
How Much Money Do You Need for a Special Needs Trust?
In Florida, there is no legal minimum or maximum limit for a special needs trust. You can fund it with any amount you wish to give to your loved one with special needs. It’s wise to set aside a significant amount of money for a special needs trust or to use a pooled trust if you don’t have that much to give. You should hire a special needs trust lawyer to help you determine the right course of action.
Hire a Special Needs Trust Lawyer Today
It’s important to know what your options are with a special needs trust before you start establishing one. At the Law Office Of Douglas A. Oberdorfer, P.A., we can provide you with the right resources to make an informed decision. Contact us to speak to someone on our team today.
