Everything You Need to Know About Special Needs Trusts Florida

A special needs trust in Florida is a type of trust that allows loved ones to leave money to a disabled family member without impacting their eligibility for public benefits. Learn more here.

What Is a Special Needs Trusts Florida?


If you have a family member or loved one with special needs who you plan to include in your estate plan, it is vital to seek guidance from an experienced estate planning attorney

Special needs trusts, sometimes known as “supplemental needs trusts,” are structured in a way that allows your loved one to remain eligible for important government benefits such as Medicaid and Supplemental Security Income (SSI). A special needs trust (often abbreviated as “SNT”) will generally include restrictions on the way that the trust assets can be distributed so that the beneficiary of the trust can continue to receive disability benefits. 

Medicaid benefits, for example, are only available in Florida to individuals who have a monthly income of $948 per month or less, and who have countable assets of $5,000 or less. With a special needs trust, the trust agreement will include language stating the trust’s assets can only be distributed in a way that allows the beneficiary to report income and asset levels below the Medicaid eligibility threshold. In this way, the trustee provides the maximum possible benefit for their beneficiary family members. 

How Much Does It Cost to Set Up a Special Needs Trust?


There are a number of different forms that special needs trusts can take. An attorney with experience in these practice areas can help you select the best special needs trust agreement for your unique situation. Depending on the type of special needs trust you and your attorney ultimately select, the cost of setting up the trust can vary. An experienced law firm can help you to understand your options and make the choice that will be most beneficial for your family member or loved one. 

Of course, the goal of any trust is to ensure the well-being of loved ones both while the trustee is alive and after the trustee passes. There are several forms of special needs trusts (SNT) available to ensure that your beneficiary (or beneficiaries) receive trust funds while retaining eligibility for public benefits such as Medicaid. 

One of the most common forms of a Florida special needs trust is known as a “third-party special needs trust.” In a third-party special needs trust, which are often created by parents or grandparents on behalf of their children or grandchildren, the trustee leaves money to the beneficiary either in a living trust (created and administered while the trustee is living) or in the form of an inheritance written into the trustee’s last will and testament. While this transfer of money and assets could normally disqualify the beneficiary from receiving social security funds or other public benefits, a skilled estate planning attorney can ensure that the trust is structured to avoid disqualifying the individual beneficiary (or beneficiaries) from important sources of government disability support. 

Another common form of special needs trust is authorized under the Achieving a Better Life Experience Act (ABLE). In an ABLE special needs trust, the trustee gifts funds to the trust beneficiary using a special account that has special rules. This method of inheritance is similar to 529 prepaid college plans.

Additional Special Needs Trusts in Florida


An additional form of special needs trust in Florida is known as a “First Party” SNT. First-party SNTs are sometimes known as “payback trusts” because the assets of the trust can be used to pay back any Medicaid lien owed on the part of the beneficiary when he or she dies. 

First-party special needs trusts can take several forms. One of these is known as a “Qualified Income Trust.” A Qualified Income Trust is typically used for someone who is under long-term care in a nursing facility or other similar institution. If a person under such care has income that exceeds the monthly limit (whether through unqualified trust distributions or other means), Medicaid will not pay for the person’s long-term care unless a QIT has been established. 

A D(4)(a) differs in several ways. Typically, estate planning attorneys assist their special needs clients to establish D(4)(a) trusts using their own money. The terms of a D(4)(a) trust require that it be established before the individual reaches 65 years of age. This form of special needs trust is beneficial when a special needs individual under the age of 65 receives a gift or inheritance in an amount that would normally disqualify them from receiving certain public benefits. Using a D(4)(a) trust can help ensure that a special needs individual who receives assets from a family member or loved one can continue to receive the government benefits on which they rely. 

The third type of first-party special needs trust is known as a “pooled trust.” Pooled trusts are typically used when a special needs individual begins to receive Medicaid benefits and wants to ensure that their assets are protected. 

Assets Considered By a Special Needs Trust Attorney Florida


In Florida, as in many other places, there is no limit on the type of assets that can be placed under special needs trusts. Typical examples include houses, investments, stocks, bonds, or other valuable assets and property. As your special needs trust attorney in Florida will tell you, each form of special needs trust comes with its own benefits and offers varying amounts of flexibility. 

For example, one benefit of a third-party trust is that the trust’s assets do not have to be paid back when the beneficiary passes away.

Pooled trusts, on the other hand, allow several beneficiaries to pool their money together while maintaining separate accounts. When one of the beneficiaries passes away, the funds in their account are transferred either to the organization overseeing the trust or to the government.

Purpose of Special Needs Trust Florida Law


Typically, trustees create special needs trusts for their family members or loved ones to pay for anything that a parent or caretaker would cover for their child or the person for whom they are caring. Examples include: 

  • Educational costs
  • Physical therapy or other medical needs not covered by Medicaid
  • Specialized medical equipment 
  • Travel costs
  • Electronics, including computers and televisions
  • Legal expenses

When you meet with an estate planning attorney at our law firm about your interest in creating a special needs trust, they will thoroughly explain Florida law to you and help you understand how your loved one may use the funds in the trust depending on their unique needs.

Who Qualifies for a Special Needs Trust?


Generally, to qualify for a special needs trust, an individual must have a disability that will require that they receive government support, including Supplemental Security Income (SSI) and Medicaid, for the duration of their lives. In some cases, individuals with limited disabilities are still able to work and earn an income. These individuals are often not eligible for special needs trusts. 

If you have a family member or loved one who may benefit from a special needs trust, contact Lehn Law today. We look forward to hearing from you.

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