Establishment of a special needs trust might gain SSI and/or Medicaid eligibility, but improper administration can cause a loss of benefits. Thus, it is imperative that trustees understand the rules governing trust distributions. A great place to begin is by reading the Special Needs Alliance Trustee Handbook.
Further, other laws unrelated to public benefits may impact special needs trust distributions. In Mazyk v. Cozze, 2012 N.J. Super. Unpub. LEXIS 2687 (2012), the court affirmed an order finding that special needs trust distributions may be recognized for the purpose of calculating a beneficiary’s child support obligation. “[D]istributions can be used to pay for vacations, technology, cable television etc. and aside from the fact that it is inequitable to allow [Cozze] to partake in such luxuries while the parties’ daughter is supported by the State, nothing prevents a determination that ‘[Cozze’s] Special Needs’ might include support for his daughter.” Although the trust assets themselves could not be used in calculating child support obligations, the distribution of those assets was properly considered. The court relied on Myers v. DeVore, 2006 Ohio 5360 (Ohio Ct. App. 2006), and Mencer v. Ruch, 928 A.2d 294 (Pa. Super. Ct. 2007), in reaching its conclusion.
Special Needs Trusts and the Purchase of a Vehicle, The Voice, Volume 6, Issue 12 (Special Needs Alliance 2012)
An Introduction to “In-kind Support and Maintenance”, The Voice, Volume 2, Issue 9 (Special Needs Alliance 2008)
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