The question of whether a special needs trust can be revocable is a common one for families seeking to protect a loved one with disabilities while maintaining some control over assets; however, the short answer is generally no, a truly effective special needs trust—one designed to preserve eligibility for government benefits like Supplemental Security Income (SSI) and Medicaid—should be *irrevocable*. Revocability fundamentally undermines the core purpose of the trust, which is to hold assets for the beneficiary’s supplemental needs without disqualifying them from crucial public assistance programs. Approximately 6.5 million Americans currently receive SSI, and Medicaid provides healthcare coverage to over 84 million, making benefit preservation paramount for many families.
What happens if I try to keep control of the assets?
If a special needs trust is revocable, the beneficiary’s access to needs-based government benefits is immediately jeopardized. Government programs view revocable trusts as assets owned by the beneficiary, thus counting against the income and asset limits for eligibility. For example, in 2024, the SSI resource limit is $2,000 for an individual; any assets held in a revocable trust would be counted towards this limit, likely disqualifying the beneficiary. A trust, by its very nature, is meant to separate ownership of assets from the beneficiary; retaining the power to revoke the trust defeats this purpose. It’s a delicate balance; you want to provide for your loved one, but not in a way that diminishes their access to vital support.
Are there any flexible options for managing the trust?
While the trust itself must be irrevocable to maintain benefit eligibility, there are ways to build in flexibility for the trustee. The trust document can, and should, outline clear guidelines for discretionary distributions, allowing the trustee to use funds to enhance the beneficiary’s quality of life without exceeding allowable limits. This might include funding recreation, education, or other supplemental services *not* covered by government benefits. Consider a scenario where a family created a special needs trust for their son, Michael, who has Down syndrome. They included a provision allowing the trustee to use funds for annual vacations, something Michael deeply enjoyed, enriching his life without affecting his SSI eligibility. A well-drafted trust document is key; it’s not about *giving up* control, but rather *redirecting* it to ensure the beneficiary’s long-term well-being.
I heard about someone losing benefits because of a trust – what went wrong?
I once worked with a family who, eager to maintain some control over their daughter’s trust, created a revocable arrangement. They intended to “tweak” things as needed, believing they could manage it without issue. Unfortunately, during a Medicaid eligibility review, the agency discovered the revocable nature of the trust. Immediately, the daughter’s Medicaid benefits were suspended. The family had to scramble, incurring significant legal fees, to unwind the trust and restructure it as an irrevocable special needs trust—a costly and stressful experience. It’s a stark reminder that good intentions aren’t enough; strict adherence to the rules is essential. Approximately 20% of initial trust drafts require significant revisions to ensure compliance with Medicaid and SSI guidelines.
How can I make sure my special needs trust is set up correctly?
Thankfully, there’s a pathway to security and peace of mind. The Peterson family came to me after years of worry, they had a son, David, with cerebral palsy, and wanted to ensure his financial security after they were gone. We worked together to create an irrevocable special needs trust, meticulously outlining the terms of distribution and ensuring compliance with all applicable regulations. After the trust was established, David’s access to SSI and Medicaid was not only preserved but enhanced. The trust funded therapies, adaptive equipment, and enriching experiences that improved his quality of life dramatically. The Petersons felt immense relief knowing David would be well-cared for, even after they were no longer able to provide for him directly. Working with an experienced estate planning attorney specializing in special needs trusts is crucial. It’s an investment in your loved one’s future and your own peace of mind—a foundation of security built on a clear understanding of the rules and a commitment to long-term planning.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
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Feel free to ask Attorney Steve Bliss about: “What should I know about jointly owned property and estate planning?” Or “What does it mean for an estate to be “intestate”?” or “What are the disadvantages of a living trust? and even: “What are the alternatives to filing for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.