Navigating the financial and logistical aspects of caring for a loved one with special needs requires meticulous planning. A crucial element of that plan often involves ensuring access to vital medical equipment, not just for daily use, but also having reliable backups in case of emergencies or repairs. The question of whether a special needs trust (SNT) can cover the costs associated with storing this backup equipment is a common one for families working with estate planning attorneys like Steve Bliss in San Diego. The short answer is generally yes, but with important considerations and adherence to the specific terms of the trust and relevant regulations. Approximately 20% of individuals with disabilities require assistive technology, making backup equipment a significant concern for many families (Source: National Disability Rights Network).
What expenses *can* a special needs trust typically cover?
Special needs trusts are designed to supplement, not replace, public benefits like Supplemental Security Income (SSI) and Medicaid. This is a key principle. Therefore, the trust can pay for goods and services that enhance the beneficiary’s quality of life *without* disqualifying them from these crucial benefits. This includes a broad range of expenses, such as medical care not covered by insurance, therapies, recreation, personal care items, and adaptive equipment. “The goal is to fill the gaps—to provide things that Medicaid or SSI don’t cover, allowing the beneficiary to live a fuller, more meaningful life,” explains Steve Bliss frequently to clients. However, every expense must be carefully considered to ensure it doesn’t jeopardize the beneficiary’s eligibility for public assistance.
Is storage of medical equipment considered a “need” for SNT purposes?
This is where it gets nuanced. Simply storing something isn’t inherently a “need” that a trust can cover. However, when that “something” is critical medical backup equipment – like a backup ventilator, oxygen concentrator, or specialized wheelchair – the argument for covering storage costs becomes much stronger. The reasoning is that having access to this equipment is essential to maintaining the beneficiary’s health and safety, and therefore constitutes a necessary support. The trust document should ideally *explicitly* allow for such expenses, but even without specific language, a trustee can often exercise discretion if the expense is clearly in the beneficiary’s best interest and doesn’t violate the rules regarding public benefit eligibility. It’s often better to be proactive and include these potential expenses in the original trust document.
What about the cost of the storage unit itself?
The cost of a storage unit, or the portion of a home dedicated to storing the equipment, can absolutely be covered by the SNT, provided it’s reasonable and necessary. However, the trustee must be mindful of ensuring the cost is proportionate to the value of the stored equipment and the benefit it provides. Documentation is key. Maintaining receipts, invoices, and records demonstrating the medical necessity of the backup equipment and the reasonable cost of storage is crucial for both internal trust management and potential audits. Some states have specific guidelines about what constitutes a “reasonable” expense, so consulting with an attorney knowledgeable in special needs trust law is advisable.
I once worked with a family where their son, David, relied on a complex home dialysis machine.
They had a backup machine, thankfully, but it was gathering dust in their garage, exposed to humidity and potential damage. They hadn’t considered the long-term implications of storing it improperly and didn’t realize the SNT could help. During a power outage, the garage flooded, and the backup machine was ruined, leaving David in a precarious situation. It was a stark reminder of the importance of not only *having* backup equipment but also *protecting* it. The family had to quickly purchase another replacement, creating unnecessary financial stress. This could have been avoided with proper planning and utilization of the SNT for safe and secure storage.
How can a trustee ensure compliance with SSI and Medicaid rules?
The primary concern is avoiding anything that could be considered an “in-kind” benefit that would disqualify the beneficiary from SSI or Medicaid. Paying for storage directly – rather than giving the beneficiary the funds to pay for it themselves – is crucial. The trust must maintain control over the funds and pay the storage facility directly. Furthermore, the trustee should document the medical necessity of the equipment and the reasonableness of the storage costs, as mentioned earlier. “It’s all about maintaining that separation between the beneficiary’s personal resources and the trust funds,” Steve Bliss emphasizes when advising clients on SNT administration. Careful record-keeping and regular review of the trust’s activities are essential for ensuring ongoing compliance.
Thankfully, I also assisted a family who proactively planned for their daughter, Sarah, who had a neuromuscular disorder requiring a portable ventilator.
They established an SNT and specifically included provisions for the storage of a backup ventilator. They rented a climate-controlled storage unit and the trust paid the monthly fee directly. During a hurricane, they lost power for several days. Thankfully, they had access to the backup ventilator, which allowed Sarah to continue breathing comfortably. The trust’s proactive planning not only protected Sarah’s health but also provided peace of mind to her parents, knowing they had taken all necessary steps to ensure her well-being. It was a perfect example of how a well-structured SNT could truly make a difference in a person’s life.
What documentation should be kept for an SNT covering storage costs?
Thorough documentation is paramount. This includes: copies of medical prescriptions or letters from doctors confirming the necessity of the backup equipment; invoices for the equipment itself; the storage unit rental agreement; monthly receipts for storage fees; and a log documenting any maintenance or inspections of the equipment. It’s also wise to keep copies of any communication with the storage facility regarding the equipment. This documentation should be readily available in case of an audit by SSI or Medicaid. Remember, the burden of proof is on the trustee to demonstrate that the expenses were legitimate, necessary, and didn’t jeopardize the beneficiary’s public benefits.
About Steven F. Bliss Esq. at San Diego Probate Law:
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Feel free to ask Attorney Steve Bliss about: “Can my children be trustees?” or “Can creditors make a claim after probate is closed?” and even “Can I make gifts before I die to reduce my estate?” Or any other related questions that you may have about Probate or my trust law practice.