Navigating the world of special needs trusts requires careful consideration of what expenditures are permissible without jeopardizing eligibility for crucial government benefits like Supplemental Security Income (SSI) and Medi-Cal. While the primary goal of a special needs trust is to supplement, not supplant, these benefits, a surprisingly broad range of expenses *can* be covered, and that includes enriching experiences like recreational activities. However, it’s not always a simple yes or no answer, and careful planning with an experienced estate planning attorney is essential. Approximately 1 in 5 Americans have some type of disability, and for those receiving needs-based government assistance, maintaining eligibility while still enhancing quality of life is a critical balance.
What Expenses are Typically Allowed from a Special Needs Trust?
Generally, a special needs trust can cover expenses that improve the beneficiary’s quality of life *beyond* what government benefits provide. This includes things like therapies not covered by insurance, adaptive equipment, specialized dietary needs, and even vacations. Recreational activities, like a bowling league membership, generally fall within this permissible category, provided they are considered supplemental and don’t provide income-producing opportunities. It’s important to remember the “not supplant” rule – the trust funds shouldn’t be used for things the beneficiary could otherwise afford with their SSI or Medi-Cal benefits. As of 2023, the average monthly SSI benefit is around $891, and many beneficiaries rely heavily on these funds for basic needs.
Could a Bowling League Membership Jeopardize Benefits?
The key to funding a recreational activity like a bowling league is ensuring it’s genuinely supplemental. If the league provides prizes or anything of monetary value, that could be considered unearned income, potentially reducing SSI benefits. However, a simple membership fee for participation, without any expectation of financial gain, is usually permissible. Consider the scenario of Mrs. Davison, a vibrant 68-year-old woman with Down syndrome. Her family established a special needs trust to help her maintain an active and fulfilling life. She loved bowling, but they were hesitant to use trust funds for a league membership, fearing it might affect her SSI. After consulting with Ted, they learned the membership was permissible as long as it was solely for recreational enjoyment.
What Happened When a Family Didn’t Plan Properly?
I recall the case of Mr. Garcia, a well-intentioned father who established a special needs trust for his son, David, who had cerebral palsy. David enjoyed photography and Mr. Garcia, wanting to encourage his hobby, used trust funds to purchase him a professional-grade camera and expensive lenses. While admirable, this wasn’t properly vetted. David began selling his photographs online, generating a small income. This income, unfortunately, was considered unearned income by the SSI administration and drastically reduced David’s benefits. It became a costly lesson in the importance of carefully considering the potential impact of even seemingly harmless expenditures. Approximately 65% of individuals with disabilities rely on government benefits as their primary source of income, making benefit preservation crucial.
How Can a Trust Be Used to Ensure Continued Recreational Enjoyment?
Fortunately, with proper planning, things can work out beautifully. Sarah, a young woman with autism, found immense joy in horseback riding. Her mother, recognizing the therapeutic benefits, established a carefully structured special needs trust. Instead of directly paying for lessons, the trust funded a qualified therapeutic riding instructor and covered transportation costs. This approach ensured Sarah received the benefits of horseback riding without jeopardizing her eligibility for critical government assistance. It’s a reminder that a well-crafted special needs trust isn’t just about preserving financial resources; it’s about empowering beneficiaries to live full and meaningful lives. As Ted often says, “A special needs trust is a tool for hope, allowing us to support loved ones with dignity and independence.”
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
(619) 550-7437
Map To Point Loma Estate Planning Law, APC, a trust lawyer near me: https://maps.app.goo.gl/JiHkjNg9VFGA44tf9
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