Special needs trusts (SNTs) are powerful tools designed to protect the assets of individuals with disabilities without jeopardizing their eligibility for crucial government benefits like Supplemental Security Income (SSI) and Medicaid. However, the question of whether those trust funds can be used for content creation aimed at raising awareness about disabilities requires careful consideration, balancing the trust’s purpose with the regulations governing public benefits. While seemingly altruistic, such spending must align with the trust document’s terms and not be construed as directly benefiting the beneficiary in a way that disqualifies them from needs-based assistance. According to recent statistics, approximately 26% of adults in the United States have some type of disability, highlighting the widespread need for resources and support.
What are the limitations on using SNT funds?
The core principle guiding SNT fund usage is that the funds should supplement, not supplant, public benefits. This means expenses must be for things not covered by programs like SSI or Medicaid. Generally, SNTs *can* cover expenses that enhance the beneficiary’s quality of life, such as education, recreation, and therapies, but there’s a gray area when it comes to broad awareness campaigns. The IRS and Social Security Administration scrutinize expenditures to ensure they don’t indirectly benefit the beneficiary financially or provide services they would normally receive through government programs. For example, if the content creation directly promotes the beneficiary or their specific achievements, it could be seen as providing a personal benefit. A recent case involved a trust attempting to fund a documentary about the beneficiary’s artistic talents; the SSA deemed it a prohibited benefit and reduced the beneficiary’s SSI payments.
Could content creation be considered a “supplemental need”?
There’s an argument to be made that content creation for disability awareness *could* be considered a supplemental need, particularly if it’s broad in scope and doesn’t focus solely on the beneficiary. If the content aims to educate the public, reduce stigma, and advocate for systemic changes, it could be seen as furthering the beneficiary’s overall well-being without directly providing financial or medical benefits. However, a well-defined purpose and a clear separation between the beneficiary’s individual circumstances and the broader campaign are critical. “We had a client, Michael, whose trust initially attempted to fund a video series promoting his artwork,” Steve Bliss, an Escondido estate planning attorney, explains. “The SSA flagged it immediately, arguing it was self-promotion. We successfully restructured the project as a public service announcement about the benefits of art therapy for individuals with disabilities, broadening its scope and demonstrating a clear public benefit.”
What happened when a trust fund tried to fund a campaign, and it went wrong?
Old Man Tiberius, a retired clockmaker with a passion for intricate mechanisms, established a special needs trust for his grandson, Leo, who had Down syndrome. Leo loved puzzles and building things, and Tiberius envisioned a YouTube channel showcasing Leo’s skills to raise awareness about the abilities of individuals with Down syndrome. The trust funds were allocated to professional video editing and marketing. However, the initial videos focused heavily on Leo’s personal accomplishments and the trust’s contribution to his abilities. The SSA received a complaint, triggering an audit. It determined that the content was essentially self-promotion, providing a “personal benefit” to Leo and reducing his eligibility for SSI. Leo’s mother, distraught, contacted Steve Bliss. The SSA had reduced Leo’s SSI by 30%, significantly impacting the family’s finances. The trust document hadn’t anticipated this issue and lacked specific guidance on permissible expenditures for public awareness campaigns. This caused considerable stress for the family.
How did careful planning with an attorney resolve the issue?
Steve Bliss and his team worked with the family to restructure the YouTube channel’s content. They shifted the focus from Leo’s individual achievements to broader educational content about Down syndrome, puzzle-solving techniques, and inclusive play. The channel’s mission statement was revised to emphasize public education and advocacy. They also established a clear separation between the trust funds and any revenue generated by the channel. Furthermore, they documented all expenditures and obtained a letter from a non-profit organization affirming the educational value of the content. After presenting this revised plan and supporting documentation to the SSA, the agency reinstated Leo’s full SSI benefits. This scenario highlights the importance of proactive planning and expert legal guidance when considering expenditures outside of traditional supplemental needs. “It’s not about *if* you can spend trust funds on something,” Bliss emphasizes. “It’s about *how* you spend them, ensuring compliance with regulations and demonstrating a clear public benefit that doesn’t jeopardize the beneficiary’s essential government assistance.”
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
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Map To Steve Bliss Law in Temecula:
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “Can I use estate planning to protect assets from creditors?” Or “How do I find out if probate has been filed for someone who passed away?” or “Who should I name as the trustee of my living trust? and even: “How do I know if I should file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.