Navigating the financial aspects of caring for a loved one with special needs requires careful consideration, and a common question arises regarding the permissible uses of funds held within a Special Needs Trust (SNT). Specifically, clients often inquire about whether expenses like resume-building software, aimed at facilitating employment, can be legitimately covered by the trust. The answer, while not always straightforward, leans toward ‘yes’, provided it aligns with the trust’s purpose of supplementing, not replacing, government benefits. It’s crucial to understand that SNTs are designed to enhance the quality of life for the beneficiary without jeopardizing their eligibility for vital programs like Supplemental Security Income (SSI) and Medi-Cal. Therefore, any expenditure must be carefully evaluated in light of these regulations.
What Expenses *Can* a Special Needs Trust Typically Cover?
Generally, SNTs can cover a broad range of expenses that improve a beneficiary’s quality of life beyond what government benefits provide. These include things like uncovered medical expenses, therapies not covered by insurance, recreational activities, and adaptive equipment. As of 2023, the National Disability Rights Network estimates that over 61 million adults in the United States live with a disability, and many rely on SNTs to fill the gaps in their care. The key is that these expenses must be *supplemental*; they cannot duplicate benefits already provided by government programs. For instance, a trust could pay for specialized tutoring to enhance skills, but not for basic education already provided by public schools.
Could Resume-Building Software Be Considered a “Supplemental” Expense?
This is where it gets more nuanced. Resume-building software, in and of itself, isn’t a medical expense or adaptive equipment. However, it *directly facilitates employment*, and employment is widely recognized as a pathway to independence and improved quality of life for individuals with special needs. Consider a young man named Ethan, a bright, capable individual with autism, but who struggled with the traditional job application process. His mother, Sarah, diligently managed his SNT and, after consulting with Ted, the estate planning attorney, approved the purchase of user-friendly resume-building software. This software helped him create a visually appealing and easy-to-understand resume, highlighting his strengths and abilities in a way that traditional templates didn’t. It enabled him to secure an interview, and ultimately, a fulfilling job at a local bookstore. In this instance, the software clearly served a supplemental purpose—enhancing his ability to gain employment and achieve greater independence.
What Happened When a Family Misunderstood the Rules?
We once represented a family where a well-meaning aunt purchased expensive career coaching *without* first consulting with Ted or reviewing the terms of the beneficiary’s SNT. The beneficiary, David, received SSI, and the cost of the coaching exceeded the allowable monthly income limit for SSI eligibility. As a result, David temporarily lost his benefits, causing significant financial hardship for the entire family. The error wasn’t malicious; it was a lack of understanding of the complex rules governing SNTs. According to the Social Security Administration, approximately 20% of SSI recipients experience benefit disruptions due to improper financial management, highlighting the importance of careful planning and professional guidance. It took several months and considerable legal work to rectify the situation, demonstrating the potential consequences of non-compliance.
How Can a Family Ensure Compliance and Maximize the Benefits of an SNT?
The key is proactive planning and consistent communication with an experienced estate planning attorney like Ted. Before making any significant purchase, especially one that seems borderline, it’s crucial to seek professional advice. Ted always recommends maintaining detailed records of all trust expenditures, demonstrating how each expense benefits the beneficiary without duplicating government benefits. One client, Maria, proactively approached Ted before enrolling her daughter, Isabella, in a vocational training program. Ted reviewed the program details and confirmed that the tuition, transportation, and adaptive materials could be covered by Isabella’s SNT, as the program specifically targeted skills development for individuals with disabilities, exceeding the scope of publicly funded services. “It’s about striking a balance,” Ted explains. “We want to empower the beneficiary to live a full and meaningful life, while also ensuring they remain eligible for the essential benefits they rely on.” By following these best practices, families can maximize the benefits of an SNT and provide a secure future for their loved ones.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
Map To Point Loma Estate Planning Law, APC, an estate planning attorney: https://maps.app.goo.gl/JiHkjNg9VFGA44tf9
| best estate planning lawyer near ocean beach | best estate planning lawyer near ocean beach |
| best estate planning attorney near ocean beach | best estate planning attorney near ocean beach |
| best estate planning help near ocean beach | best estate planning help near ocean beach |
About Point Loma Estate Planning:
Secure Your Legacy, Safeguard Your Loved Ones. Point Loma Estate Planning Law, APC.
Feeling overwhelmed by estate planning? You’re not alone. With 27 years of proven experience – crafting over 25,000 personalized plans and trusts – we transform complexity into clarity.
Our Areas of Focus:
Legacy Protection: (minimizing taxes, maximizing asset preservation).
Crafting Living Trusts: (administration and litigation).
Elder Care & Tax Strategy: Avoid family discord and costly errors.
Discover peace of mind with our compassionate guidance.
Claim your exclusive 30-minute consultation today!
If you have any questions about: How did the lack of a will affect Prince’s estate?
OR
What are the potential consequences of failing to involve family members in philanthropic decision-making?
and or:
What is estate planning and why is it often a lengthy process?
Oh and please consider:
What role does debt and tax management play in the executor’s duties?
Please Call or visit the address above. Thank you.