Georgia families that include a person with special needs have a variety of government plans that provide several types and amounts of financial assistance. Some of these programs have financial limits on eligibility, which means that many people who would benefits from the plans are financially disqualified because their income or assets exceed the limits for the plan. Medicaid is one of the most notable examples of how such limits work to deprive otherwise eligible individuals of the benefits of such plans.
To solve such problems estate planning attorneys in Georgia and elsewhere have invented three special needs planning tools known generically as "special needs trusts." These trusts came into existence after Congress made certain changes to the Medicaid eligibility law in 1993. The first type of trust is known as a "(d)(4)(A) trust." This trust can be used to hold assets belonging to the special needs person that would otherwise prevent the person from receiving Medicaid benefits. Assets held in such a trust can be used to pay for the beneficiary's medical care, therapy and equipment not covered by Medicaid. These trusts are also a convenient vehicle to hold the proceeds of a personal injury lawsuit. All assets remaining in a (d)(4)(A) trust at the death of the beneficiary must be paid to the Social Security Administration to reimburse it for amounts paid on the beneficiary's behalf under Medicaid.
A second type of trust is one established under Section (d)(4)(C) of the Medicaid statute. These trusts are commonly referred to as "pooled account trusts." Such a trust is managed by a third-party, and it may hold assets from many different persons with special needs. Such trusts are especially useful for individuals who do not possess enough assets to make a separate trust economically feasible.
Some persons elect to create a special needs trust in their will if their spouse has a progressive diseases such as Alzheimer's. In such cases the healthy spouse may not want to leave financial decisions to the disabled spouse if he or she should become disabled.
Drafting the proper kind of special needs trust usually requires the assistance of an attorney who is experienced in estate planning law.