The New York Probate Lawyer Blog contains previous posts concerning the benefits of a Supplemental Needs Trust. Briefly, a Supplemental Needs Trust (“SNT”) is a trust that allows assets to be held for the benefit of a person who is receiving governmental benefits such as Medicaid or social security disability. The maintenance of the trust fund will not interfere with or cause these benefits to be discontinued. The SNT trustee can use the trust to provide additional services or care for the SNT beneficiary over and above those provided by Medicaid or Social Security payments. New York Estates, Powers and Trust Law (“EPTL”) Section 7-1.12 provides the statutory provisions required for a trust to be qualified as a SNT.
As discussed previously, there are many situations in which a SNT can be established. For example, a person can establish a SNT in a Last Will to be funded upon death with the trust assets to be utilized for a person who is incapacitated or otherwise receiving governmental benefits. Another situation where a SNT is common is in connection with an Article 81 Guardianship. Instead of holding a person’s funds under the guardianship where the funds may cause Medicaid or other benefits to be discontinued or where the funds may be required to repay Medicaid claims, the assets can be placed in a Court approved SNT. Recently, in a decision by Nassau County Surrogate Edward McCarty III in Property of Alan Frederick Silverman decided on October 29, 2013 and reported in the New York Law Journal on December 16, 2013, the Court allowed the establishment of a SNT. In this case an incapacitated person for whom a guardian was appointed was the recipient of funds from the estate of his father. The guardian was allowed by the Court to create a SNT and to place the estate assets into the trust thus preserving them for the benefit for the incapacitated person.
I have represented numerous clients where a SNT was established in conjuction with the client’s appointment as the guardian of a person’s property and personal needs. Generally, the Courts are very receptive to creating these trusts since they afford incapacitated and disabled individuals the ability to afford services and care above those provided by governmental benefits.