SPECIAL NEEDS TRUST

A Medical Assistance Special Needs Trust (also known as a “Special Needs Trust”) is a special type of legal entity that preserves a person’s assets for their long-term care. It also can protect a recipient’s ability to receive Medicaid to help pay for residential care facility costs.

Specifically, it solves the problem of a Medicaid-eligible person who has resources (assets) which would make him or her ineligible for benefits. It is an irrevocable trust, drafted by an attorney, that holds the person’s assets for their benefit.

A Special Needs Trust can contain any assets of the individual, including inherited funds, tort recoveries, or annuity payments from litigation settlement. The assets are held and accumulated in the Trust and can be paid out monthly. A 2015 change to Iowa law now allows for distributions from the Trust for the sole benefit of the beneficiary to enhance the quality of life.

Distributions are at the sole discretion of the Trustee. However, the Iowa Code requires that a Court Order be obtained if this amount will exceed $1000. It is a relatively simple process to obtain Court approval for this expense and then manage the Special Needs Trust independent of Court oversight.


If you or your loved ones are considering a Special Needs Trust, consult an experienced attorney at Abendroth Russell Barnett Law Firm to assist you in the process.

 

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