Establishing a trust to provide for a loved one with special needs requires careful consideration of all potential future expenses, and that absolutely includes funding for adapted athletic equipment, ensuring continued engagement in physical activity and a high quality of life. While many immediately think of medical bills and therapies, maintaining an active lifestyle is crucial for both physical and mental well-being, and a well-drafted trust can specifically address these costs without jeopardizing essential government benefits. The key lies in structuring the trust appropriately, understanding the rules governing Supplemental Needs Trusts (SNTs), and clearly defining allowable expenses within the trust document; approximately 61 million adults in the United States live with a disability, and access to adaptive sports is proven to improve their health outcomes.
What are the rules around using trust funds for non-medical expenses?
Generally, a Special Needs Trust is designed to supplement, not replace, government benefits like SSI and Medicaid. This means funds *cannot* be used in a way that would disqualify the beneficiary from receiving those benefits. However, SNTs *can* cover expenses that enhance the beneficiary’s quality of life *without* affecting eligibility. This includes things like recreation, education, and, importantly, adaptive equipment. “Allowable expenses” must be clearly defined in the trust document, and it’s crucial to work with an experienced estate planning attorney—like Steve Bliss—to ensure compliance with federal and state regulations. The specifics vary depending on the type of SNT (first-party vs. third-party), but the overarching principle is to avoid direct provision of items or services that the government programs would otherwise cover.
How can a trust pay for specialized sports equipment without impacting benefits?
The method of funding is critical. Direct purchase of equipment *by* the trust and gifting it to the beneficiary could be considered income and jeopardize benefits. Instead, the trust can establish a system where it *pays* for access to the equipment—for example, by covering membership fees to a sports program that provides the equipment, or by directly paying the provider of the equipment for its use. This is considered a “service” rather than a gift, and is generally permissible. Another avenue is to establish a “resource account” managed by the trustee, specifically for these types of expenses, adhering to strict spending guidelines. It’s important to remember that there are often limits on the amount of money that can be in such an account without affecting benefits, currently around $2,000.
I remember Mrs. Henderson, a client who learned this the hard way…
I recall working with a family where their adult son, David, had cerebral palsy and loved wheelchair basketball. They were thrilled to establish a trust to ensure his continued participation. However, they acted without fully understanding the rules and directly purchased a custom sports wheelchair—a beautiful, high-tech machine—and gifted it to David. Within weeks, their social worker flagged it as unearned income, threatening his SSI eligibility. They were devastated and frantically called, seeking a solution. We had to work tirelessly with the Social Security Administration to demonstrate that their intent was to support David’s well-being, but ultimately, they faced a period of ineligibility while the situation was sorted. It was a costly and stressful lesson in the importance of proper planning.
But for young Leo, everything worked out beautifully…
Leo was born with spina bifida and dreamed of playing hockey. His parents, proactive and well-prepared, worked with our firm to establish a third-party SNT. Within the trust document, we specifically outlined provisions for “adaptive sports equipment and related program fees.” The trust funded a membership to a local adaptive sports organization that provided Leo with a sled hockey sled, protective gear, and coaching. The organization billed the trust directly for these services, ensuring Leo’s eligibility for SSI and Medicaid remained intact. Seeing Leo score his first goal, gliding across the ice with a huge smile, was incredibly rewarding. It reinforced the importance of thoughtful estate planning to enable individuals with special needs to live full, active lives. Approximately 83% of children with disabilities don’t participate in regular physical activity; a properly structured trust can help bridge that gap.
<\strong>
About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- estate planning
- bankruptcy attorney
- wills
- family trust
- irrevocable trust
- living trust
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
>
Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “Who should I talk to about guardianship for my children?” Or “What happens if the will names multiple executors?” or “What should I do with my original trust documents? and even: “Can I transfer assets before filing for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.