Purposes
For Use of a Special Needs Trust
by
Herbert D. Hinkle, Esq. and Ira M. Fingles, Esq.
Herbert D. Hinkle
Law Office
2651 Main Street
Lawrenceville, New Jersey 08648
(609) 896-4200 or (215) 860-2100
Frequently, we
have written about special needs trusts. Actually, we prefer the term
"a trust with limitations," because many of the so-called
"special needs trusts" that we have seen over the years
are unsuited for their intended purposes: protection of a person with
a disability and preservation of eligibility for services.
Today, we would
like to address some of the purposes for which such trusts can be
used. The authors have drafted more than 3,000 such trusts. Here are
some thoughts:
First, it is important
not to duplicate services available through government programs, but
the trustee should be authorized to weigh the comparative quality
of what is available. For instance, many physicians will not accept
Medicaid. In addition, Medicaid might only pay for a stainless steel
tooth cap and not a porcelain one. Thus, the trustee must be allowed
to spend money on quality medical and dental care. The trust should
be explicit on this point.
The trustee should
be allowed to pay for vacations, day trips and the like with or without
the company of a friend or companion. But equally important, the trustee
should be authorized to pay for costs incurred by others when visiting
or handling the affairs of the person with a disability. We do not
want a spouse on the West Coast complaining that his wife is dipping
into personal savings to pay for a trip to visit her brother in the
East. Similarly, the trust can pay for people to monitor the care
provided to a person with a disability. In other words, a family member
can hire someone or an organization to be his/her eyes and ears.
The trustee should
have the option of purchasing real estate in which the person with
a disability will live. (Obviously, in some cases, the disabilities
are too profound for that to be feasible.) The trust must provide
that the person with a disability will be charged rent. In one case,
HUD paid rent to a trust to offset the rental costs incurred by the
person with a disability. Also, the trust should have the flexibility
to pay for modifications to the home of a family member with whom
the person with a disability might live.
For some people,
an automobile might be important. The trust should have the capacity
to pay for transportation (but never own a vehicle), and equally important,
to pay for the insurance and maintenance of the vehicle.
In future columns,
we will discuss this topic further.
Copyright 2001
H.D. Hinkle. All rights reserved.
Mr. Hinkle maintains
a multi-state law practice with offices in Lawrenceville, Florham
Park, and Marlton, NJ, and Yardley, Pa. Mr. Hinkle and his colleagues
Ira Fingles, and Paul Prior lecture and write frequently on topics
of law, aging, and disability, and are available
to speak to groups in New Jersey and Pennsylvania
at no charge. Call (609) 896-4200.
