Can a Special Needs Trust Own a Home? | Illinois Special Needs Trusts

Can a Special Needs Trust Own a Home? | Illinois Special Needs Trusts

Article written by Illinois & Iowa Attorney Kevin O'Flaherty
Updated on
November 1, 2019

In a recent article, we explained how Special Needs Trusts, also known as Supplemental Needs Trusts, can be used to allow individuals with disabilities to earn income, accumulate wealth, receive gifts and inheritances, and maintain a quality lifestyle while still qualifying for government benefits.

As explained in that article, assets held by a Special Needs Trust cannot be used on "shelter" or groceries without reducing the amount of SSI benefits that the beneficiary of the trust is entitled to receive.

I was recently asked by a client whether a home owned by a Special Needs Trust would qualify as shelter.  In fact, if title to real estate is transferred to a Special Needs Trust, this does not count as "shelter" for the purposes of reducing SSI benefits.  Mortgage and utility payments associated with shelter (such as heat, electricity, and water), do however, qualify as payments toward "shelter," and would serve to reduce the amount of SSI benefits to which the beneficiary is entitled.  However, if there is no mortgage on the home, transferring real estate to a Special Needs Trust is an effective way to provide for the housing of the beneficiary without having the value of the home reduce the amount of that individuals SSI benefits.  

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Can an Illinois special needs trust own real estate?

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