Supplemental Needs Trusts Permissible Distributions
Trustees administering a third party supplemental needs trust or a first party supplemental needs trust often seek guidance on permissible expenditures. The answer begins with a question: What government benefits is the beneficiary receiving? Under certain government programs, the beneficiary’s receipt of trust funds directly or via distributions to certain vendors can adversely affect the beneficiary’s eligibility for the government benefits. Other government programs, such as Social Security Disability Insurance (SSDI), are not related to assets or unearned income, but depend on the beneficiary’s ability to be substantially gainfully employed.
The following is a non-exclusive list of permissible expenditures that should not adversely affect a beneficiary who is receiving Supplemental Security Income (SSI) and/or Medicaid. While the following is meant to provide guidance, each SNT Trustee should consult with counsel regarding their proposed budget and plan for making distributions.
SAMPLE PERMISSIBLE EXPENDITURES FROM SNT
- Transportation expenses, including vehicle purchase, modifications, tickets, gas, repairs, insurance, possibly the expenses of a driver, bus pass, public transportation passes
- Home purchase (or down payment), and home improvements, including modifications for handicapped use (all to the extent not covered by government programs)
- Home alarm and/or monitoring/response system
- Security deposit on apartment
- Landscaping/ snow removal/ lawn service
- Storage units
- Tickets to concerts or sporting events (for the beneficiary and an accompanying companion)
- Care manager
- Unreimbursed medical and dental expenses
- Eyeglasses
- Annual independent check-ups
- Health, homeowner’s, automobile and life Insurance (including payment of premiums)
- Rehabilitation
- Elective surgery
- Over the counter medications (including vitamins and herbs)
- Pet and pet’s supplies, veterinary services
- Acupuncture/Acupressure
- Conferences
- Courses or classes (academic or recreational) including supplies
- Essential dietary needs, diapers
- Dry cleaning and/or laundry services
- Linens, towels
- House cleaning/ maid service
- Purchase of computer or electronic equipment, videos, internet service, cable service
- Purchase appliances (i.e. microwave, stove, refrigerator, washer/dryer)
- Repair services (appliance, bicycle, household, fitness equipment)
- Pay for trips, camps, vacations, entertainment i.e. going to a movie, ballgame, concert, etc. (must avoid giving ticket to beneficiary who could then liquidate and convert to cash)
- Athletic training or competitions, fitness equipment
- Purchase clubs/ dues (book clubs, health clubs, Advocacy Groups, museums)
- Personal care attendant, companion, or escort
- Massage
- Purchase furniture, television, wireless headsets, iPods
- Federal and state taxes
- Attorney’s fees, Trustee’s fees, accountant’s fees
- Prepaid burial expenses
- Personal effects: clothing, jewelry, educational or recreational items such as books, musical instruments and hobby materials, including lessons..
- Non-food grocery items (laundry soap, bleach, fabric softener, deodorant, hand and body soap, personal/hygiene products, paper towels, napkins, toilet paper and household cleaning products)
- Payment of debts
- Respite for family members
Certain distribution from a Supplemental Needs Trust will result in a reduction in the monthly SSI payment:
- mortgage payments, real property taxes, heating and cooling bills, electricity, water, sewage, garbage collection
- Groceries and meals
- Cash for any purpose (beyond the $20 SSI monthly allowance)