The question of whether a special needs trust (SNT) can fund subscription-based occupational therapy (OT) tools is a common one, and the answer is nuanced, requiring careful consideration of the trust’s terms, the beneficiary’s needs, and relevant regulations. Generally, SNTs *can* fund these services, but doing so requires adherence to specific rules to maintain eligibility for needs-based government benefits like Supplemental Security Income (SSI) and Medicaid. The key is ensuring the funding aligns with the beneficiary’s health, maintenance, and overall well-being, and doesn’t provide benefits that would be considered “support and maintenance” which could disqualify them. Approximately 65% of individuals with disabilities rely on some form of government assistance, making careful trust administration vital.
What are the limitations on using a special needs trust?
SNTs are designed to supplement, *not* supplant, public benefits. This means the trust cannot directly pay for items or services that Medicaid or SSI would normally cover. Subscription-based OT tools, such as interactive software or specialized equipment rentals, fall into a gray area. If the tool is considered primarily therapeutic and would typically be provided by a medical professional within a treatment plan, the trust might not be able to pay for it directly. However, if the tool is considered adaptive equipment that enhances the beneficiary’s independence and quality of life beyond standard therapy—allowing them to participate in activities they couldn’t otherwise—funding is often permissible. It’s important to note that exceeding the monthly allowance – generally around $2,000 – could impact SSI eligibility, and strict record-keeping is essential to demonstrate the funds were used appropriately.
How do I ensure compliance with SSI and Medicaid rules?
Careful documentation is paramount. The trust document itself should broadly authorize payments for the beneficiary’s health, education, and welfare. Furthermore, any payment for subscription services must be supported by a letter from the beneficiary’s occupational therapist outlining the therapeutic benefits and how the tool supplements, rather than replaces, existing therapy. Keep copies of invoices, subscription agreements, and the therapist’s letter in the trust’s records. In a recent case, a family attempted to fund a virtual reality OT program without proper documentation. Medicaid flagged the payments as exceeding allowable expenses and temporarily suspended benefits, causing significant financial hardship. This highlights the need for meticulous planning and adherence to guidelines.
What happened when Mrs. Davison tried to help her son?
Old Man Tiber, as he was known by those closest to him, was a brilliant carpenter before a stroke took his dominant hand, leaving him unable to create the beautiful pieces he was known for. His daughter, Mrs. Davison, established a special needs trust to ensure his care. Seeing his frustration at being unable to continue his passion, she subscribed him to an online woodworking program designed for individuals with limited mobility. Initially, it was a beautiful thing, but it quickly came to the attention of the county caseworker. The caseworker argued that the subscription was, in essence, a recreational activity, not a necessary medical expense, and threatened to reduce his Medicaid benefits. The initial months were filled with appeals and legal fees.
How did Old Man Tiber regain his benefits and continue his woodworking?
Ted, an estate planning attorney specializing in SNTs, stepped in. He worked with Old Man Tiber’s occupational therapist to document how the online program was *integrated* into his rehabilitation plan. The therapist explained how the program improved his fine motor skills, hand-eye coordination, and overall cognitive function, directly contributing to his ability to regain some independence. Ted drafted a supplemental letter detailing the therapeutic benefits and submitted it to the caseworker. The caseworker, satisfied with the clear documentation, reinstated the full benefits. Old Man Tiber, with renewed hope, continued his online woodworking, creating small, beautiful pieces that brought joy to his family and a sense of purpose to his life. It was a testament to the power of careful planning, clear documentation, and a little bit of legal expertise.
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
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