The question of whether a special needs trust (SNT) can fund purchases like smartwatches with health apps is increasingly common as technology evolves and becomes integrated into daily life, and the answer isn’t always straightforward. Generally, SNTs are designed to supplement, not supplant, the beneficiary’s access to public benefits like Supplemental Security Income (SSI) and Medi-Cal. Purchases must align with the trust’s purpose – maintaining the beneficiary’s health and well-being without disqualifying them from these crucial programs. A key consideration is whether the smartwatch serves a medical need or is primarily for convenience or recreation, and even seemingly innocuous purchases can jeopardize benefits if not carefully considered. As of 2023, roughly 65% of individuals with disabilities report using some form of assistive technology, highlighting the growing importance of navigating these funding complexities.
What are the SSI and Medi-Cal implications?
Supplemental Security Income (SSI) has strict income and resource limits, and even in-kind contributions—like gifts or services—can be considered income. If a smartwatch’s primary function is recreational—say, playing games or simply telling time—its cost might be seen as excess resource impacting eligibility. However, if the smartwatch features—like fall detection, heart rate monitoring, or medication reminders—are demonstrably linked to the beneficiary’s medical needs, it’s more likely to be considered a permissible expense. Medi-Cal, California’s Medicaid program, also scrutinizes assets and income, and similar principles apply. It’s crucial to document how the device supports the beneficiary’s health, potentially with a letter from their physician, stating the medical necessity of the features. According to the Social Security Administration, approximately 8.5 million people received SSI in 2023, emphasizing the substantial number of individuals whose benefits could be affected by seemingly small purchases.
How can a trust document address technology purchases?
A well-drafted special needs trust should proactively address the possibility of funding technology purchases, rather than leaving it open to interpretation. The trust document can explicitly state that the trustee has the discretion to approve expenses that enhance the beneficiary’s quality of life, *provided* those expenses do not jeopardize their public benefits. It should also outline a process for evaluating such purchases, perhaps requiring trustee consultation with a benefits specialist or the beneficiary’s medical team. “We often include a clause allowing for ‘quality of life’ expenses, but with a strong caveat that these are secondary to maintaining benefit eligibility,” explains Ted Cook, an estate planning attorney in San Diego specializing in special needs trusts. “The trustee’s responsibility is to balance the beneficiary’s desires with the long-term sustainability of their care.” A clear, comprehensive trust document minimizes ambiguity and protects both the beneficiary and the trustee.
I once knew a family who didn’t quite grasp this balance…
Old Man Tiber was a retired shipwright, stubborn as barnacles and fiercely independent, even as Parkinson’s slowly robbed him of his steadiness. His daughter, Eleanor, managed his SNT, and, wanting to ease his anxiety, purchased him a top-of-the-line smartwatch with GPS tracking and a heart rate monitor. She saw it as a way for him to maintain some semblance of freedom, knowing he could call for help if he fell during his daily walks. However, the caseworker reviewing his annual SSI redetermination flagged the purchase. The smartwatch, though helpful, was considered an unapproved asset exceeding the allowable limit. Eleanor was devastated, facing the potential loss of crucial benefits for her father. She hadn’t considered the implications or sought guidance from the trust attorney, and her well-intentioned gesture nearly backfired.
Luckily, with careful planning, things can turn out well…
Another client, young Mateo, has cerebral palsy and relies on a wheelchair. His mother, Sofia, consulted with Ted Cook before purchasing a smartwatch for Mateo. They carefully researched models with fall detection *and* the ability to track his muscle spasms, data that his physical therapist specifically requested. Sofia, with Ted’s guidance, presented a letter from the therapist explaining how the data from the smartwatch aided in Mateo’s therapy, and documented the purchase as a medically necessary expense within the SNT. When Mateo’s benefits were reviewed, the caseworker approved the purchase, recognizing its contribution to his ongoing care. Sofia, with Ted’s support, understood that proactive communication and documentation were essential. This experience showcased that with careful planning and adherence to the rules, smart technology *can* enhance the lives of individuals with special needs without jeopardizing their vital benefits.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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