Special needs planning: What Is a WisPACT Trust?

Many people with disabilities depend on programs like Supplemental Security Income (SSI) and Medical Assistance. Getting approved for these programs can take months and a lot of paperwork.

There is a catch. These programs have strict limits on how much money a person can own. If someone goes over the limit, they can lose their benefits.

This can happen in ways you might not expect. A relative might leave money to a loved one in a will. A person might be named on a life insurance policy or retirement account. Someone might receive money from an injury lawsuit. These gifts are meant to help. Instead, they can cause the person to lose the benefits they rely on. Once the money runs out, they must apply all over again.

In Wisconsin, a person cannot simply give the money away or turn it down to fix the problem. Either option can still cost them their benefits.

There is a better way. The money can go into a special trust called a Wispact trust. Wispact stands for Wisconsin Pooled & Community Trusts, a type of special needs trust. Think of a trust as a safe box that holds money for someone. Money in a Wispact account does not count against the person's benefit limits.

Who can set one up? A person with a disability can put their own money into a Wispact trust (i.e., a first-party special needs trust). A parent, grandparent, or other loved one can also set one up for them (i.e., a third-party special needs trust). If the person cannot sign papers, their power of attorney or guardian may be able to sign for them.

What can the money pay for? The trust can pay for things that make life better, such as vacations, dental and eye care that insurance won't cover, school costs, furniture, cars, home repairs, cleaning help, and even cable TV. There are some rules. The money must be used only for that person, and specific benefit programs may place limits on what the trust can be used for.

If a Wispact trust could help your family, call our office to schedule an appointment to discuss special needs planning. You can also learn more at www.wispact.org.