The question of whether a special needs trust (SNT) can fund subscription safety monitoring devices is a common one for families caring for loved ones with disabilities. The short answer is generally yes, but it’s nuanced and depends heavily on the specific terms of the trust, the beneficiary’s needs, and relevant state and federal regulations. SNTs are designed to improve the quality of life for individuals with disabilities without disqualifying them from needs-based government benefits like Supplemental Security Income (SSI) and Medicaid. These benefits often have strict income and asset limitations, and an SNT allows the beneficiary to receive funds without losing eligibility. Approximately 6.6 million children in the US have been identified with a developmental disability, highlighting the substantial need for planning resources like SNTs. The key is ensuring that the purchases align with the trust’s intent and don’t jeopardize those benefits. It’s crucial to work with an experienced estate planning attorney, like Steve Bliss, to navigate these complexities.
What are the permissible uses of a special needs trust?
A special needs trust can cover a broad range of expenses that enhance the beneficiary’s quality of life. These expenses can include things like medical care not covered by insurance, therapy, recreational activities, education, and even personal care items. Importantly, the trust can also pay for services that help the beneficiary maintain their health and safety, which is where safety monitoring devices come into play. These devices, such as medical alert systems, GPS trackers, or smart home technology designed for safety, fall under the umbrella of permissible expenses if they demonstrably improve the beneficiary’s well-being and don’t provide something the beneficiary would normally pay for themselves. However, the trust document needs to be broad enough to encompass these types of purchases, or an amendment may be required. Roughly 20% of individuals with disabilities report experiencing some form of abuse or neglect, underscoring the importance of proactive safety measures.
Can safety monitoring devices be considered “medical expenses” for SNT purposes?
Determining whether a safety monitoring device qualifies as a “medical expense” is a critical step. If the device is primarily intended to diagnose, treat, mitigate, or prevent a physical or mental condition, it’s more likely to be considered a medical expense. For instance, a GPS tracker used to monitor a beneficiary with Alzheimer’s disease who is prone to wandering could be seen as a necessary safety measure related to their cognitive impairment. Similarly, a medical alert system for someone with a seizure disorder would likely qualify. However, a basic home security system installed simply to deter burglars might not be considered a medical expense. Steve Bliss often advises clients to obtain documentation from a medical professional outlining the necessity of a particular device to strengthen the claim that it’s a legitimate medical expense. According to the National Center for Health Statistics, individuals with disabilities are more likely to experience chronic health conditions, further emphasizing the need for ongoing medical support.
How does funding these devices affect SSI and Medicaid eligibility?
This is where things get complex. SSI and Medicaid have strict income and asset limitations. If funds from the SNT are used to purchase items or services that are considered “unearned income” or that increase the beneficiary’s assets above the allowable limits, it could jeopardize their eligibility. However, funds used for “qualified medical expenses” or “needs-based support” – meaning expenses that would otherwise be the beneficiary’s responsibility – are generally excluded from income calculations. The key is to ensure the purchases are made directly by the trustee, or the trustee reimburses the beneficiary for qualifying expenses, and are properly documented. It’s also vital to avoid using SNT funds to purchase items that provide solely comfort or convenience, as these are less likely to be considered necessary medical expenses. The Social Security Administration estimates that approximately 8.3 million people receive SSI benefits, making the preservation of eligibility paramount for many families.
What documentation is needed to support these purchases?
Meticulous record-keeping is essential when using SNT funds for any purpose, but particularly for safety monitoring devices. Documentation should include the purchase invoice, a detailed explanation of how the device enhances the beneficiary’s health and safety, and a letter from a medical professional (physician, therapist, etc.) outlining the necessity of the device. This letter should clearly state the beneficiary’s medical condition, how the device addresses that condition, and why it’s necessary for their well-being. In addition, the trustee should keep a record of all payments made for the device, including subscription fees or maintenance costs. This documentation will be crucial if the beneficiary’s eligibility for SSI or Medicaid is ever questioned.
A story of unintended consequences…
Old Man Tiberius was a proud man, a retired carpenter with hands that still remembered the feel of wood. His grandson, Leo, had cerebral palsy, and required 24/7 care. Tiberius, determined to provide for Leo beyond what state programs offered, established an SNT, and meticulously funded it. He decided, on his own, that a sophisticated home security system with cameras and sensors was essential for Leo’s safety. He paid for the installation and monitoring directly from the trust, without consulting an attorney or obtaining a medical evaluation. A year later, Leo’s Medicaid benefits were unexpectedly reviewed. The security system was deemed a non-medical expense, an asset that increased Leo’s overall resources, and he was temporarily denied coverage. The family was frantic, scrambling to provide the necessary care while fighting the denial. It was a stressful situation born out of good intentions, but a lack of informed planning.
How proper planning averted a crisis…
Across town, the Ramirez family faced a similar concern for their daughter, Sofia, who had Down syndrome and a tendency to wander. But unlike Old Man Tiberius, they sought the guidance of Steve Bliss. They obtained a letter from Sofia’s pediatrician recommending a GPS tracking device to ensure her safety and prevent her from getting lost. The trust document explicitly allowed for the purchase of medically necessary equipment and services. When the Ramirez family purchased the GPS tracker and paid the monthly subscription fee from the SNT, they carefully documented the purchase, the doctor’s letter, and the trust provisions. During a routine Medicaid review, the documentation was readily available, and Sofia’s benefits were seamlessly maintained. The Ramirez family had proactively taken the correct steps and did not worry over a stressful financial or medical situation.
What role does the trustee play in this process?
The trustee of the SNT has a fiduciary duty to act in the best interests of the beneficiary. This includes making prudent financial decisions and ensuring that all purchases from the trust are in line with the trust’s terms and relevant regulations. The trustee must also maintain accurate records and be prepared to provide documentation to support any expenses. When considering the purchase of a safety monitoring device, the trustee should consult with a qualified attorney and medical professional to ensure that the purchase is permissible and justifiable. They must also consider the long-term costs of the device, including subscription fees and maintenance costs, and ensure that the trust has sufficient funds to cover those expenses.
Can a trust be amended to explicitly allow for these purchases?
If the existing trust document doesn’t specifically address the purchase of safety monitoring devices, it can often be amended to do so. An amendment allows the trustee to have clear authority to make these purchases without fear of jeopardizing the beneficiary’s benefits. The amendment should clearly define what types of devices are permissible, the criteria for determining medical necessity, and the documentation requirements. It’s important to work with an experienced attorney to draft the amendment and ensure that it complies with all applicable laws and regulations. A well-drafted amendment can provide peace of mind and ensure that the beneficiary receives the care and support they need.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate 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.
Map To Steve Bliss at San Diego Probate Law: https://g.co/kgs/WzT6443
Address:
San Diego Probate Law3914 Murphy Canyon Rd, San Diego, CA 92123
(858) 278-2800
Key Words Related To San Diego Probate Law:
probate attorney
probate lawyer
estate planning attorney
estate planning lawyer
Feel free to ask Attorney Steve Bliss about: “What records should a trustee keep?” or “How do I challenge a forged will?” and even “What is the estate tax exemption in California?” Or any other related questions that you may have about Estate Planning or my trust law practice.