Absolutely, a special needs trust can often pay for items like a therapy swing or hammock, provided it aligns with the beneficiary’s special needs and the trust’s terms, and doesn’t jeopardize their public benefits eligibility.
What are the rules around using trust funds for quality of life improvements?
Special Needs Trusts (SNTs) are designed to supplement, not replace, government benefits like Supplemental Security Income (SSI) and Medicaid. This means funds can be used for things those benefits *don’t* cover – and that’s where things like therapy swings and hammocks come in. These items, while enhancing quality of life, can be directly related to a beneficiary’s therapeutic needs, especially for individuals with sensory processing disorders, autism, or other conditions where vestibular input is beneficial. It’s crucial, however, to document *why* the item is necessary for the beneficiary’s health and well-being, rather than simply a desired comfort. According to a 2023 study by the National Disability Rights Network, approximately 68% of families with special needs children report needing supplemental funds to cover therapeutic and recreational expenses.
How does a special needs trust avoid impacting government benefits?
The key is careful planning and adherence to the rules. The IRS has specific guidelines regarding what SNTs can pay for without affecting benefits. Generally, “in-kind” support that doesn’t exceed the value of the services the beneficiary would otherwise receive is permissible. A therapy swing, for example, might be approved if it replaces or supplements occupational therapy sessions. It’s vital to work with an experienced estate planning attorney, like Ted Cook here in San Diego, to ensure the trust document is drafted to allow for these types of expenditures. According to the Social Security Administration, improper use of trust funds can result in a reduction or termination of SSI benefits, a risk no family wants to take. “A well-structured SNT acts as a safety net, allowing beneficiaries to enjoy a better quality of life without losing crucial support,” states Ted Cook.
What happened when a family didn’t plan properly?
I recall the Peterson family, who came to us after a difficult situation. Their son, Leo, had cerebral palsy and benefited greatly from regular sensory integration therapy. They had a small inheritance and, wanting to provide Leo with ongoing support, they set up a trust without fully understanding the rules. They purchased a beautiful, expensive therapy swing for his backyard, thinking it would be a wonderful addition to his life. Unfortunately, they hadn’t consulted an attorney experienced in special needs trusts. Because the swing was considered an unapproved expenditure, it jeopardized Leo’s SSI eligibility. They were facing the prospect of losing essential benefits – a heart-wrenching situation. They quickly engaged our services to revise the trust document and demonstrate the therapeutic value of the swing, but it was a stressful and costly ordeal they could have avoided with proper planning.
How did careful planning save the day for the Ramirez family?
The Ramirez family came to us proactively, before their daughter, Sofia, even turned 18. Sofia has Down syndrome, and they wanted to ensure she’d have the resources to live a fulfilling life. We drafted a comprehensive Special Needs Trust that specifically allowed for therapeutic equipment, recreational activities, and other quality-of-life enhancements. When Sofia’s occupational therapist recommended a therapy swing to help with her balance and coordination, the Ramirez family knew exactly how to proceed. They documented the therapist’s recommendation, obtained the necessary approvals, and purchased the swing without any concerns about jeopardizing Sofia’s benefits. It was a seamless process because they had taken the time to plan ahead and work with an experienced attorney. “Peace of mind is priceless when it comes to protecting your loved ones with special needs,” says Ted Cook. Their story is a testament to the power of proactive estate planning and the importance of understanding the rules surrounding Special Needs Trusts.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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