For those who live in Colorado with a disability, or have a family member living with a disability, it will come as no surprise to hear that there are many hidden costs associated with disabilities. For example, an individual with a serious disability will likely have higher medical expenses, and may need assistance taking care of routine tasks. They may also need to pay for assistive devices or plan for modified transportation.
Medicaid helps many individuals living with disabilities to cover some of these costs. In addition, Supplemental Security Income (SSI) benefits provide individuals with monthly assistance. However, once a person is receiving Medicaid/SSI benefits, they must remain below specific asset and income levels. If a loved one provides cash to someone receiving SSI or Medicaid benefits, it can reduce the level of benefits and may result in benefit ineligibility. In practice, this makes it difficult for loved ones to provide any meaningful support, because doing so could jeopardize these benefits.
A Colorado special needs trust (SNT), also referred to as a supplemental needs trust, is an excellent way to provide support to someone with a disability without jeopardizing their benefits. An SNT can either be “self-funded” or opened by a third party. A third-party special needs trust is one opened by anyone other than the person who is named as the beneficiary. Funds that are transferred into an SNT do not count as “assets” for Medicaid eligibility purposes. The same goes for income that is assigned to the trust. Thus, family members can open a trust in the name of a loved one living with a disability, and can transfer money into the account for their loved one to use.