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Securing the Future for Individuals with Disabilities

By: Merideth Nagel, Esq. May 10, 2024 no comments

Securing the Future for Individuals with Disabilities

Supplemental Needs Trusts (SNTs) play a critical role in estate planning for individuals with disabilities in Florida. These specialized trusts are designed to provide financial support to disabled beneficiaries without jeopardizing their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). In this blog post, we’ll dive into the key aspects of SNTs in Florida, including their purpose, types, eligibility requirements, and how they can help families secure the future for their loved ones with disabilities.


Purpose of Supplemental Needs Trusts:
The main purpose of an SNT is to enhance the quality of life for individuals with disabilities by supplementing the benefits they receive from needs-based government programs like Medicaid and SSI. Unlike other trusts, SNTs are crafted to provide for the “extras” that government benefits may not cover, such as recreational activities, travel, education, and medical treatments not covered by Medicaid.


Types of Supplemental Needs Trusts:
In Florida, there are two main types of Supplemental Needs Trusts: First-Party and Third-Party.

1. First-Party SNTs: Also known as “self-settled” or “payback” trusts, these are funded with the disabled individual’s own assets, such as a personal injury settlement or inheritance. Upon the beneficiary’s death, any remaining funds in the trust must be used to reimburse the state for Medicaid benefits provided to the beneficiary during their lifetime.

2. Third-Party SNTs: These trusts are established and funded by third parties, such as parents, grandparents, or other relatives, using their own assets. Unlike First-Party SNTs, there is no requirement to repay Medicaid upon the beneficiary’s death. Third-Party SNTs allow families to leave inheritances or gifts for the benefit of a loved one with disabilities while preserving their eligibility for government benefits. These types of SNTs can also be created by instructions in your own Revocable Living Trust.


Eligibility and Requirements:
To qualify for a Supplemental Needs Trust in Florida, the beneficiary must meet the eligibility criteria for government benefits like Medicaid and SSI. Additionally, the trust document must adhere to strict legal requirements outlined in state and federal laws, including provisions that prevent the trust funds from being used for basic needs that government benefits already cover.


How SNTs Can Help:
Supplemental Needs Trusts offer several benefits for individuals with disabilities and their families, including the following:

– Protection of government benefits – By sheltering assets in an SNT, individuals with disabilities can maintain eligibility for essential government benefits like Medicaid and SSI.

– Enhanced Quality of Life – SNT funds can be used to supplement government benefits, allowing beneficiaries to enjoy a higher quality of life with access to additional resources and services.

– Peace of Mind for Families – Families can rest easy knowing that their loved one’s financial future is secure and that they have taken steps to provide for their long-term care and well-being.

Supplemental Needs Trusts are invaluable tools in estate planning for individuals with disabilities in Florida. By understanding the purpose, types, eligibility requirements, and benefits of SNTs, families can navigate the complexities of planning for their loved one’s future with confidence. If you have a family member with a disability and are considering incorporating a Supplemental Needs Trust into your estate plan, consult with an experienced estate planning attorney who can provide personalized guidance tailored to your unique circumstances.

-Heather Ward, Esq.

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