The question of whether a special needs trust can fund customized wearable tech for mobility tracking is increasingly relevant as technology advances and the needs of beneficiaries evolve. Traditionally, special needs trusts (SNTs) were established to cover basic needs like housing, medical care, and therapies, but the scope is expanding to include items that enhance quality of life and promote independence. While not explicitly prohibited, funding such technology requires careful consideration of the trust’s terms, the beneficiary’s individual needs, and potential impacts on government benefits. Roughly 65% of individuals with disabilities report needing assistance with daily living activities, highlighting the potential for tech to address these needs.
What are the limitations when using trust funds for non-traditional expenses?
SNTs are meticulously structured to avoid disqualifying a beneficiary from needs-based government assistance programs like Supplemental Security Income (SSI) and Medicaid. These programs often have strict asset limits; if a beneficiary directly owns assets exceeding those limits, they risk losing eligibility. A key principle is that the trust must not provide resources that would be considered “income” or “resources” available to the beneficiary for the purposes of these programs. Therefore, expenditures from the trust must genuinely benefit the beneficiary without violating those rules. For example, if a wearable device simply *tracks* mobility without providing a medically necessary service, it might be viewed as a discretionary item, potentially impacting benefits. The IRS provides guidance on permissible trust expenses, but interpretations can be complex and fact-specific, often requiring legal counsel.
How can a trust be structured to allow for technology purchases?
To successfully fund technology like mobility tracking wearables, the trust document should be drafted with sufficient flexibility. A well-crafted trust will include broad language outlining permissible expenses, encompassing items that enhance the beneficiary’s health, safety, and well-being. Specifically mentioning “assistive technology” or “adaptive equipment” can be helpful. It’s also crucial to demonstrate a clear link between the technology and the beneficiary’s special needs. For instance, a GPS-enabled wearable that alerts caregivers if a beneficiary with autism wanders off could be justified as a safety measure. The cost of the device, data plans, and any associated maintenance should be clearly documented as a legitimate trust expense. Approximately 30% of individuals with developmental disabilities are at risk of wandering, showcasing the real-world utility of such devices.
I remember a case where a family didn’t plan properly…
Old Man Tiberius, a retired sailor, had a son, Finn, with Down syndrome. Tiberius, fiercely independent, believed in providing for Finn’s future, establishing a robust SNT. However, he hadn’t anticipated the rapid advancement of technology. Finn, as an adult, loved exploring the local beach, but his cognitive limitations meant he sometimes wandered off. The family, wanting to ensure his safety, purchased a sophisticated GPS tracking bracelet, hoping to cover the cost with the trust. When they submitted the expense to the trustee, it was initially denied. The trustee argued it was a “luxury item” not covered by the trust and might jeopardize Finn’s SSI benefits. The family was distressed; they felt the technology was essential for Finn’s safety and their peace of mind. They were left scrambling for alternative funding solutions.
Thankfully, careful planning saved the day…
Fortunately, a neighbor, a paralegal, advised the family to seek legal counsel specializing in special needs trusts. The attorney reviewed the trust document and, importantly, prepared a detailed justification outlining how the GPS tracker was a medically necessary safety device, directly addressing Finn’s wandering tendencies and potential risks. She included a letter from Finn’s doctor supporting the use of the technology. The attorney also drafted a supplemental trust amendment explicitly including “assistive technology and safety devices” as permissible expenses. With this documentation, the trustee approved the expense, and Finn was able to enjoy his beach outings with increased safety and his family experienced peace of mind. This highlighted the importance of proactive planning and seeking expert advice when navigating complex trust regulations, and ensuring the trust language accommodates evolving needs.
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