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Can A Special Needs Trust Pay For Food And Shelter?

12/21/2022 | Special Needs Trust
Can A Special Needs Trust Pay For Food And Shelter

For someone with a disability, having a special needs trust can be the difference between having what they need to be comfortable and just getting by. One of the most important features of this resource is that it can be used to pay for the trust beneficiary’s qualifying expenses without endangering his or her public benefit eligibility.  However, trust payments need to be made carefully.  Otherwise, they could be considered income to the beneficiary.  Many beneficiaries want to know:  Can a Special Needs Trust Pay for Food and Shelter?

Qualifying Expenses

It seems like your special needs trust should cover all of your expenses, especially food and shelter. After all, this resource is supposed to supplement the limited benefits provided by Med-Cal, Social Security Income (SSI), and subsidized housing programs.  However, when a special needs trust is used to pay for certain expenses, including housing and food, there can be consequences.  Specifically, the Social Security Administration counts certain trust disbursements as “in-kind support and maintenance” (ISM) for the beneficiary.  This means that if payments are made from the special needs trust for expenses such as food, mortgage payments (including property insurance), real property taxes, rent, heating fuel, gas, electricity, water, sewer, or garbage removal, for the benefit of the beneficiary, they could be considered income when calculating benefit eligibility.  The same problem can come up if the beneficiary is paid money directly from the trust or if he or she receives a gift which is not properly directed into the trust.  However, there are some assets which a beneficiary can own without being considered countable as income.  Additionally, depending on the situation, when property such as a home is owned by the trust, it may not be disqualifying asset.

The good news is that a special needs trust will cover many other costs which can improve the recipient’s quality of life.   For instance, the trust payments can cover expenses such as those connected to educational and vocational training, event tickets, clothing, gym memberships, psychology sessions, house cleaning, massage services, travel and vacation, cable television and internet services, and even expenses for pets.

Law Offices of Alice  A. Salvo, we have the experience you need to plan for your loved one’s present and future care.  Please contact us online or by phone to set up a free consultation today to start your solution.