Means tested benefits– Government benefits that have a financial requirement. You must prove you qualify to the government agency providing benefits. It is vital in SNT planning that the beneficiary not be disqualified. If a trust beneficiary can compel a distribution from the trust, the trust assets will be countable. For example, if you have a first party special needs trust or third party supplemental benefits trust pay rent for the beneficiary with disabilities, you may disqualify the beneficiary since SSI benefits are intended to pay for shelter. If money is used to pay a provider it is treated as in kind. If a trust is established under someone’s Will that disqualifies the beneficiary, all is not lost. You can go to court and try to reform the trust by showing the probable intent of the testator not to disqualify the beneficiary from government benefits.
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