Special Needs Trust - Cancer Science

What is a Special Needs Trust?

A Special Needs Trust (SNT) is a legal arrangement designed to benefit individuals with disabilities by holding assets in a trust to provide for their needs without disqualifying them from receiving government benefits. For cancer patients, this can be particularly important as they may face significant medical and living expenses while needing to maintain eligibility for programs like Medicaid and Supplemental Security Income (SSI).

Why is a Special Needs Trust Important for Cancer Patients?

Cancer treatment can be incredibly expensive, and patients often need ongoing care and support. An SNT can help manage these costs by ensuring that funds are available for non-covered expenses such as experimental treatments, special therapies, and other quality-of-life improvements. It also prevents the depletion of personal assets which could jeopardize eligibility for essential public benefits.

Types of Special Needs Trusts

There are three main types of SNTs:

First-Party SNT: Funded with the assets of the person with a disability (e.g., a cancer patient) and often used when the individual receives a large settlement or inheritance.
Third-Party SNT: Funded by someone other than the beneficiary, such as parents or other family members, and typically used for estate planning purposes.
Pooled SNT: Managed by nonprofit organizations, pooling resources from multiple beneficiaries while maintaining separate accounts for each.

How to Set Up a Special Needs Trust for a Cancer Patient?

Setting up an SNT involves several steps:

Consult with an Attorney: An experienced estate planning attorney can help navigate the legal requirements and ensure the trust is properly established.
Identify the Trustee: Choose a trustworthy individual or institution to manage the trust assets responsibly.
Fund the Trust: Determine the source of funding, such as personal savings, life insurance policies, or inheritances.
Draft the Trust Document: The document should outline the terms of the trust, including the types of expenses covered and the powers of the trustee.
Maintain Compliance: Regularly review the trust to ensure it remains compliant with state and federal regulations.

What Can a Special Needs Trust Pay For?

An SNT can cover a wide range of expenses that improve the beneficiary's quality of life without affecting their eligibility for public benefits. These may include:

Medical and dental care not covered by insurance
Rehabilitation services and therapies
Personal care attendants
Home modifications for accessibility
Educational and recreational activities
Transportation
Electronics and communication devices

How Does a Special Needs Trust Affect Government Benefits?

One of the primary advantages of an SNT is that it enables individuals to receive supplemental support without losing their eligibility for government benefits. Assets held in an SNT are not counted towards the resource limits for programs like Medicaid and SSI, ensuring that cancer patients can continue to receive necessary public assistance while also benefiting from additional financial resources.

Can a Special Needs Trust Be Changed or Terminated?

Yes, an SNT can be modified or terminated under certain circumstances. Changes may be necessary if the beneficiary's condition improves or if there are changes in laws affecting trusts. Termination typically occurs upon the death of the beneficiary, at which point any remaining assets are distributed according to the terms of the trust or returned to the state if required by Medicaid payback provisions.

Conclusion

For cancer patients, a Special Needs Trust provides a vital safety net that can help manage the financial burden of treatment and care while preserving access to essential public benefits. By understanding the different types of SNTs, their benefits, and how to set them up, families can make informed decisions to support their loved ones through challenging times.