A Supplemental Needs Trust is intended to “supplement” the government benefits provided by Supplemental Security Income (“SSI”) and Medicaid. Hence, the only thing that a Supplemental Needs Trust cannot pay relates to the “food and shelter” of the trust beneficiary.

Things that a Supplemental Needs Trust can Pay

The money in a Supplemental Needs Trust can be used for almost anything that is not illegal and the list of things that can be paid for is broad.  A Supplemental Needs Trust can pay for non-food grocery items, home purchases, furniture, pet and pet supplies, education expenses, elective surgery, an automobile, clothing, appliances, gasoline, home improvements, insurance, legal fees, therapy (physical therapy, occupational therapy and speech therapy) not covered by Medicaid, vacation, life insurance and burial policies.

If a Supplemental Needs Trust owns a house or has enough assets to buy one, the beneficiary can live in the house rent-free without affecting his Supplemental Security grant.

Things that a Supplemental Needs Trust cannot Pay

A Supplemental Needs Trust cannot pay for the “food and shelter” of the trust beneficiary.  This means that the monthly Supplemental Security Income payments can be reduced or eliminated if the trustee of the Supplemental Needs Trust gives the beneficiary cash or pays for the beneficiary’s food or shelter.

The Supplemental Needs Trust cannot pay for “shelter”, i.e., mortgage payments, rent, real estate taxes, gas, electricity, water, sewer, homeowners’ insurance and condo charges.

If the trustee pays for the beneficiary’s food or shelter, the amount paid is considered income to the beneficiary.  Trust payments for rent or mortgage payments on a house owned by a  beneficiary are considered in-kind support and maintenance, so they trigger a reduction of the SSI grant.  Trust payments for grocery items, i.e., food, are also counted an in-kind support and maintenance, and will reduce the amount of the Supplemental Security Income grant.

The trust beneficiary can never have control over the trust money.  Because the beneficiary has no control over the trust money, the money in a Supplemental Needs Trust is not counted as a resource for purposes of determining eligibility for Supplemental Security Income or Medicaid.

What you can do if you have questions about a Supplemental Needs Trust

If you have questions about a Supplemental Needs Trust, I welcome your phone call on my toll-free cell at 1-866-889-6882 or you can send me an e-mail at jfisher@mmolaw.  You are always welcome to join the  mailing list for my newsletter about medical malpractice, Your Malpractice Insider, by sending me an e-mail with your name and address.