Special Needs Trusts
Social Security limits how much a person under the age of 65 is allowed to have in assets and income to still qualify for Medicaid and SSI. Typically an individual would be disabled due to a birth defect or due to an injury which has resulted in a disability.
They are basically two types of Special Needs Trust.
First Party Special Needs Trust
First is what is known as a First Party Special Needs Trust which is used in the case of a disabled person using part of his proceeds for a personal injury settlement to go into a Special Needs Trust established by the court or by his legal guardian so that monies can be held in this Trust and not be disqualified regarding Social Security and Medicare.
Third Party Special Needs Trust
The second type of Special Needs Trust is referred to as a Third Party Special Needs Trust. This would be a trust typically used by a parent, grandparent or other interested person who wants to provide some benefits for a disabled person but in such a fashion as to not disqualify them from Medicaid or Medicare and Social Security benefits. These trusts are very complicated and rules are complex but the benefits are substantial.
Ted W. Hoyt practices in Special Needs Trusts.