The question of whether a special needs trust (SNT) can fund subscriptions for mental wellness apps is a nuanced one, deeply rooted in the specific terms of the trust, the beneficiary’s needs, and relevant Supplemental Security Income (SSI) and Medicaid regulations. Generally, SNTs are designed to supplement, not supplant, government benefits. Therefore, the key is whether the app subscription is considered a “necessary” expense that enhances the beneficiary’s quality of life without disqualifying them from essential public assistance programs. It’s crucial to remember that approximately 6.5 million adults in the U.S. live with an intellectual or developmental disability, and many experience co-occurring mental health challenges, making access to supportive resources vital.
What Expenses Can a Special Needs Trust Cover?
Typically, SNTs can cover a broad range of expenses that benefit the beneficiary, including medical care not covered by insurance, therapies, recreation, education, and personal care items. However, the IRS and the Social Security Administration (SSA) scrutinize expenses that might be considered “support and maintenance,” which could jeopardize benefits. A mental wellness app subscription *could* fall into an allowable expense category if it’s demonstrably linked to improving the beneficiary’s overall health and well-being, potentially preventing more costly interventions down the line. As of 2023, approximately 1 in 5 U.S. adults experience mental illness each year, highlighting the importance of proactive mental health support. The documentation of a professional recommendation, such as from a therapist or psychiatrist, detailing how the app supports the beneficiary’s treatment plan, significantly strengthens the case for allowability.
Will Paying for Apps Affect SSI or Medicaid Eligibility?
This is the most critical consideration. SSI and Medicaid have strict income and resource limits. If the SNT is a first-party SNT (established with the beneficiary’s own funds), there are even more stringent rules. Any distribution from the trust that provides something the beneficiary could theoretically purchase themselves with their SSI benefits is usually considered unallowable. However, if the app provides services *beyond* what SSI would cover – such as specialized therapeutic techniques or personalized support – it’s more likely to be considered allowable. As of late 2024, the federal SSI benefit for an individual is $943 per month, and for a couple, it’s $1,415 per month. Exceeding the resource limits (currently $2,000 for an individual and $3,000 for a couple) can lead to a loss of benefits. It’s vital to remember that even seemingly small expenses can add up and impact eligibility.
A Story of Unplanned Consequences
Old Man Tiberio, a retired fisherman, established a first-party SNT for his grandson, Leo, who had autism and anxiety. Leo enjoyed using a meditation app to manage his anxiety, and his grandmother, eager to support him, began paying for the subscription directly from the SNT. Unfortunately, she didn’t consult with an estate planning attorney. During a Medicaid eligibility review, it was discovered that the monthly subscription fee was considered excess income, and Leo temporarily lost his Medicaid benefits. The family was devastated. It turned out that the cost of the app, while seemingly small, exceeded the allowable income limit for Medicaid eligibility in their state. They had to spend considerable time and effort to rectify the situation, requiring legal assistance and retroactive adjustments to the trust distributions.
A Lesson in Proactive Planning
Fortunately, a colleague, Ms. Esposito, had a similar situation with her brother, Marco, who also benefited from a SNT and used a cognitive behavioral therapy (CBT) app. Recognizing the potential for issues, Ms. Esposito proactively engaged Ted Cook, an estate planning attorney specializing in SNTs. Ted reviewed the app’s features, confirmed that it provided services beyond what standard therapies covered, and drafted a letter of medical necessity from Marco’s therapist detailing the app’s therapeutic benefits. This documentation was submitted to the SSA and Medicaid agency, and the app subscription was approved as an allowable expense. “It wasn’t just about the money,” Ms. Esposito explained, “It was about ensuring Marco had access to the tools he needed to thrive without jeopardizing his benefits. Ted’s guidance was invaluable.” By prioritizing proactive planning and documentation, Ms. Esposito successfully navigated the complexities of SNT funding and ensured her brother’s continued access to vital mental health support.
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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