Pursuing Peace Of Mind For You And Your Family

What expenses can special needs trusts cover?

Certain disabilities can make it virtually impossible to learn to read. Still, because reading is a necessary competency for many jobs, not being able to read can make it virtually impossible to secure employment. Indeed, according to reporting from PBS, about 36 million Americans do not have jobs primarily because they cannot read.

Fortunately, many government programs provide a safety net for individuals who cannot work. To qualify for these programs, of course, a person must have limited financial resources. If the person is a beneficiary of a special needs trust, though, he or she can receive public help while still having access to other funds.

The conundrum

Beneficiaries of special needs trusts cannot use disbursements from their trusts to pay for the same expenses that public programs traditionally cover. This generally means a person may not use trust disbursements on living expenses or basic medical care. If the beneficiary uses trust disbursements improperly, he or she might lose government financial support.

Acceptable disbursements

Even though disbursements from a special needs trust often cannot pay for ordinary living expenses, they can cover supplemental expenses. These are expenses that improve a person’s quality of life, usually including the following:

  • Education, training and learning
  • Recreation, hobbies and travel
  • Uncovered medical and dental care
  • Therapy and rehabilitation
  • Transportation

If the beneficiary of a special needs trust cannot read, the trustee might need to modify the way he or she accepts disbursement requests. Ultimately, though, the trustee should review each request to ensure it does not violate the rules of the beneficiary’s public benefits.