The question of whether a special needs trust (SNT) can cover assistive technology is a critical one for families planning for the long-term care of a loved one with disabilities; the answer is generally yes, but with important considerations and limitations. Assistive technology, encompassing devices like wheelchairs, communication aids, environmental control systems, and computer software, can significantly enhance the quality of life for individuals with special needs, but these items often come with a substantial price tag. A properly structured SNT can be a vital tool in ensuring that funds are available to cover these necessary expenses without disqualifying the beneficiary from crucial government benefits like Supplemental Security Income (SSI) and Medicaid. According to the National Assistive Technology Act, approximately 5.4 million Americans could benefit from assistive technology, highlighting the significant need and potential financial burden.
What are the rules around using trust funds for ‘necessary’ expenses?
The core principle governing SNT distributions is that they must be used for the “supplement” of the beneficiary, meaning they can cover expenses not already provided by government benefits. Assistive technology clearly falls into this category, as it is often not fully covered by programs like Medicaid, and is essential for the beneficiary’s health, safety, and well-being. However, it’s not simply about the item itself; the trust document must explicitly allow for these types of purchases. Many trusts will have a broad clause allowing for “health, education, maintenance, and support,” which generally includes assistive technology, but clarity is key. A trust can specify types of acceptable expenses, define acceptable dollar limits, and require pre-approval for larger purchases, ensuring responsible financial management.
What happens if the trust isn’t clear about assistive technology?
I remember working with a family, the Millers, whose adult son, David, had cerebral palsy. They had established a SNT years prior, but it was fairly generic, lacking specific language regarding assistive technology. When David needed a new, highly specialized wheelchair with advanced controls – costing upwards of $25,000 – the trustee hesitated to authorize the purchase, fearing it might jeopardize David’s SSI eligibility. The trustee worried that the government could see the expenditure as something beyond “basic needs.” After a lengthy review of the trust document, and consultations with a benefits specialist, they were able to proceed, but the delay caused significant stress and frustration. It took weeks to assemble the documentation proving the necessity of the wheelchair. This case emphasized the importance of anticipating future needs and incorporating specific provisions for assistive technology within the trust.
How can a trust be structured to best cover future assistive technology costs?
Proactive trust planning is crucial for addressing assistive technology expenses. When drafting the trust, consider including a specific allocation of funds for “adaptive equipment and technology.” This designated amount can be periodically reviewed and adjusted to reflect evolving needs and technological advancements. Furthermore, the trust can authorize the trustee to establish a dedicated “assistive technology fund” within the trust, managed separately to ensure availability when needed. It’s also wise to include language that allows the trustee to consult with qualified professionals, such as occupational therapists or assistive technology specialists, to determine the most appropriate and cost-effective solutions. Approximately 61% of individuals with disabilities report needing assistive technology to participate fully in daily life, reinforcing the need for financial preparation.
Can you share a story of how proper planning helped a family?
The Andersons came to me with a clear vision for their daughter, Emily, who has Down syndrome. They were meticulous in their planning, creating a highly detailed SNT that specifically addressed future assistive technology needs. Years later, when Emily began to lose her verbal communication skills, they were able to seamlessly fund a sophisticated speech-generating device – an iPad with specialized software and a durable case – through the trust. Because the trust language was so clear and the funding was pre-allocated, the process was smooth and stress-free. Emily quickly adapted to the device, regaining her ability to express herself and connect with others. The Andersons’ experience highlighted the power of proactive trust planning. They had anticipated future needs, prepared financially, and empowered Emily to live a full and meaningful life. They made sure the trust was funded to the maximum extent possible, under the gift tax rules, ensuring a sustainable resource for Emily’s lifetime.
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