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The Self-Funded Special Needs Trust-
A New Opportunity for Disabled Persons
When a disabled person faces the prospect of admission to a long-term health care facility and finds himself unable to pay for the stay indefinitely, he or she usually need to apply for government benefits to pay for the continued care. To qualify for the benefits, he will face the choice of either spending down almost all of his or her assets before becoming eligible for government benefits, or preserving the assets by proper planning.
A Special Needs Trust is a vehicle provided under New York law to hold and administer the assets of a disabled person, while preserving that person’s eligibility for government benefits. However, generally, it has been viewed as a trust that is either established by a court order with funds available as a result of a litigation, such as a personal injury settlement, or set up in a third- party's will or trust. In other words, the trust has not been created with the assets of a disabled but competent person on his own petition to the court..
There is important news in this area. Recently,
a decision was rendered by a respected New York court, which permitted the creation of a Special Needs Trust by a disabled individual without the prior appointment of a guardian. In short, a disabled person can now set aside his own property to be used to supplement future government benefits without first being declared incompetent to handle his own financial affairs. The law does, however, provide for some limitations. Among these are:
• The disabled person must be under age 65;
• The trust is not otherwise protected from the claims of other creditors; and
• Any medical expenses paid by the government benefits must be repaid out of any remaining principal of the trust at the death of the disabled person.
Our firm has established many Special Needs Trusts in the past. We look forward to developing these trusts under these new, expanded guidelines. If you or a person you know appears to be in the same situation as described here, we would be pleased discuss the possibility of setting up such a Special Needs Trust. Please call our office for an appointment for a free consultation.
See urgent news about Health Care Proxies
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626 Reckson Plaza
Uniondale, NY 11556
Telephone
(516) 522-2575
Index of Estate Practice Areas
Wills, Estates, Trusts and Estate Planning Estate Administration and Accounting
Estate Litigation, Representation of Out-of-Town Beneficiaries Estate Planning for the Non-Traditional Family
Planning for a Disabled Relative
Trust Index
Life Insurance Trust Credit Shelter Trust Pet Trust Totten Trust Minority Trust
Copyright © 2007 STEPHEN C. SILVERBERG, PLLC All rights reserved.
Last modified: December 27, 2007
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