The idea of using Special Needs Trusts for Elder Law planning is not a new one, but it has been a frustrating area of the law for many years. Special Needs Trusts created under the OBRA-93 laws are specifically designed to be used for the benefit of disabled individuals under the age of 65.
To date, there is no Federal law that permits the use of OBRA Trusts for Senior Citizens.
Some States have adopted Statutes that allow for the limited use of Federally-recognized “Income Trusts” (sometimes called “Miller Trusts”) or Cooperative Master (“Pooled”) Trusts for persons over the age of 65.
These laws vary from State to State. They affect and are affected by each State’s individual Medicaid Program rules and Probate laws. Very few States have gone further in creating laws to assist the elderly.
FORTUNATELY FOR FLORIDA’S SENIORS, THE FLORIDA LEGISLATURE HAS ENACTED ONE OF THE MOST FLEXIBLE AND “FRIENDLY” LAWS IN THE COUNTRY TO ASSIST IT’S LARGE POPULATION OF NEEDY AND DISABLED ELDERLY, WHICH THE FLORIDA LEGISLATURE CALLS
THE QUALIFYING SPECIAL NEEDS TRUST
UNDER FLORIDA STATUTE SECTION 732.2025 (8)
A “Qualifying Special Needs Trust” or “Qualifying Supplemental Needs Trust” is a trust established for a disabled surviving spouse. Some of the requirements of such a trust are:
- The trust must be created before or after the decedent’s death – with court approval.
- The income and principal are distributable to or for the benefit of the spouse for life in the discretion of one or more trustees, less than half of whom are ineligible family trustees.
- “Ineligible family trustees” include the decedent’s grandparents and any descendants of the decedent’s grandparents who are not also descendants of the surviving spouse.
- During the spouse’s life, no person other than the spouse has the power to distribute income or principal to anyone other than the spouse.
- The requirement for court approval shall not apply if the aggregate value of all property in all qualifying special needs trusts for the spouse is less than $100,000.