The recent revelation about the financial standing of Social Security’s Disability Insurance program was not a surprise to many. Those close to the SSA had been issuing warnings for years indicating that the current model was unsustainable and that an overhaul was necessary.
A recent story by the New York Post cited a government report indicating that the fund could run out of money as early as 2016. The Disability Trust Fund is supposed to be a safety net for millions of workers who need assistance when they are unable to work. The issue has not garnered as much attention in Florida as current political issues, but it is expected to be a high profile issue very soon.
While lawmakers on both sides of the aisle are working on a solution, a number of Americans are beginning to create their own special needs trusts as part of their extended estate plans. A special needs trust is a trust created for the benefit of a disabled beneficiary. The disability could be a physical or mental one; but the overall intent is the same: to help a disabled person without compromising his (or her) eligibility for Social Security benefits.
This will be increasingly important as eligibility rules change for disability benefits. It is expected that as resources become scarce, edibility will become more difficult. When this situation occurs, it is important to have another option available.
Special needs trusts are complex legal entities and require careful planning. If you have questions about how these trusts work, or how they can benefit a disabled loved one, an experienced estate planning attorney can help.
Source: NY Post.com, Disabled fund, June 9, 2013