Norwalk Special Needs Trust Lawyers

Experienced Family Law Attorneys Protecting Your Assets

Special needs trusts can be very beneficial in protecting the inheritance of children and adults with disabilities as well as protecting the assets of the elderly. These trusts are used by many families as part of an effective estate planning strategy to ensure that the beneficiaries remain eligible for Medicaid (Title XIX) without putting their hard earned assets at risk. But trusts are complicated financial instruments, and they should not be set up without the assistance of a qualified attorney.

At our law firm, our experienced attorneys help clients in Connecticut set up special needs trusts to keep control of their assets and remain eligible for Medicaid (Title XIX) benefits. We can help simplify the process and make sure you create the right financial vehicle for your individual circumstances.

Special needs trusts, also known as OBRA trusts in reference to the Omnibus Budget Reconciliation Act of 1993, are designed to benefit a disabled or elderly individual that is receiving Medicaid (Title XIX) for long-term or nursing home care. A special needs trust can also be utilized to become eligible for Supplemental Security Income (SSI).

Types of Special Needs Trusts

There are generally two different types of special needs trusts that can be set up to maintain an individual’s eligibility for Medicaid (Title XIX): self-funded and third party trusts.

Self-Funded (Self-Settled) Special Needs Trusts

A self-funded special needs OBRA trust is created using the funds of the individual under the direction of a parent, grandparent, guardian or court. The individual may transfer assets into the trust to allow them to protect these assets from being considered in a Medicaid (Title XIX) application. The major benefit is the ability of the individual to reduce the value of his/her assets below the threshold for Medicaid (Title XIX) eligibility, allowing the individual to receive the health care coverage necessary without losing his/her property. One downside to self-funded OBRA trusts is they include a payback provision; meaning that upon the death of the individual, the state of Connecticut receives payback from whatever is remaining in the trust for health care services rendered.

Third Party Trusts

A third party special needs trust is created and funded by someone other than the beneficiary. These trusts are typically set up by a parent or grandparent to ensure that the inheritance of a special needs child or disabled adult will be protected when they pass on. The trust can be effective either during the third party’s life or after his/her death, but the beneficiary is not allowed to contribute any funds to it. The inheritance of the beneficiary remains inside the trust and does not affect his/her eligibility for Medicaid (Title XIX) benefits. And unlike self-settled trusts, third party trusts do not include a payback provision, so the assets within the trust can be safely passed on to future generations as well.

Special needs (OBRA) trusts can be very difficult to create. There are several issues that must be considered to ensure that you are setting up the right financial vehicle to address your needs. Whether you need to protect the assets of a special needs child, disabled adult or aging loved one, the attorneys at Lovejoy and Rimer, P.C. can guide you through the process and create the special needs trust that is right for you. Contact us today at 203-853-4400 for your free consultation. From our Norwalk, CT office, our law firm represents clients for elder, family law and estate planning issues in Greenwich, Norwalk, Ridgefield and communities throughout Fairfield County.


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