Using a Special Needs Trust for your child who is on SSI or Medicaid.

Attorney Tom Olsen: I get more and more clients these days that need to have what's called a special needs trust. What would be the typical situation that would call for a client to use a special needs trust?

Attorney Robert Hidock: Typically, somebody has an adult child or a child that is on Social Security Disability, and on Medicaid. If they were to inherit money from their parents, it would kick them off of Medicaid's asset limit and then they would not be able to receive the government benefits that they're receiving. We can create a special needs trust that will allow them to receive the benefits while still receiving the government benefits.

As part of the trust, the trustee can't actually give them cash, but they certainly can pay for their needs, anything that they would want. It's a supplemental trust, not to take the place of medic, Medicaid, or disability income. It's to help them live a normal life so they can receive their inheritance from their father or mother.

Attorney Tom Olsen: If we set up a special needs trust they continue to get their governmental benefits but they also get the benefit of what's being left to them by Mom and Dad to this special needs trust. Just off the top of my head, for example, a special needs trust could pay for like a cell phone or cable TV, or Christmas gifts. What else you would be typical with that?

Attorney Robert Hidock: Well, it could actually even pay for a car, if the person was able to live by themselves. They could pay rent with it, they could pay a caregiver. I've even seen if someone wanted to go on vacation it can pay for a vacation, and someone to go to take care of that person.

Attorney Tom Olsen: The client that I saw last week, their son was on SSI. He was on disability. I don't know what he was receiving per month but it certainly probably not enough to live on, I would suggest.

Attorney Robert Hidock: Probably not.

Attorney Tom Olsen: With that, they really do need the benefit of Mom and Dad's money but, again, they can't get it outright, otherwise, their governmental benefits would end. That would have to be left to him through a special needs trust, and that's what we do for people,

Attorney Robert Hidock: Correct, and so the trustee then could help and pay the mortgage or rent that person a place to live.

Attorney Tom Olsen: With a special needs trust, as long as the son is alive, he gets the benefits of Mom and Dad's money and then it states that once the son is passed away whatever's left over might go to our clients' other children.

Attorney Robert Hidock: To the beneficiaries.

Attorney Tom Olsen: It doesn't have to be used to pay back Social Security or Medicaid. It can actually be passed right on to the kids.