Absolutely, a special needs trust can, and often *should*, pay for data encryption software for sensitive files, recognizing the increasing importance of digital security in protecting a beneficiary’s information and maintaining their eligibility for vital government benefits.
What exactly *is* a Special Needs Trust and why is digital security important?
A Special Needs Trust (SNT) is a legal arrangement designed to hold assets for a person with disabilities without disqualifying them from needs-based government assistance programs like Supplemental Security Income (SSI) and Medicaid. These programs have strict income and asset limits, and direct ownership of assets can jeopardize eligibility. Approximately 61 million adults in the United States live with a disability, and many rely on these crucial benefits. Digital security is paramount because sensitive personal and financial information, medical records, and benefit details are increasingly stored online. A data breach could lead to identity theft, financial exploitation, and, crucially, jeopardize benefit eligibility if it appears the beneficiary is managing assets directly.
How does data encryption software fit into permissible trust expenses?
Permissible expenses from an SNT are generally those that supplement, not supplant, government benefits. This means the trust can pay for items and services that improve the beneficiary’s quality of life *beyond* what public assistance provides. Data encryption software clearly falls into this category. It isn’t a basic need covered by SSI or Medicaid; instead, it’s a protective measure. The cost of a robust encryption suite can range from $50 to $200 per year, a relatively small expense considering the potential financial and personal devastation a data breach could cause. Think of it like purchasing a secure lock for a physical safe – the digital realm requires the same level of protection. Steve Bliss, an estate planning attorney specializing in special needs trusts, frequently advises clients to incorporate digital security measures into their trust planning.
I once knew a family who learned this lesson the hard way…
Old Man Tiber, a retired carpenter, lived a quiet life thanks to an SNT established by his devoted sister. He wasn’t tech-savvy, and his niece, tasked with managing the trust, allowed him to use a basic, unsecured tablet for video calls with family. She figured he mostly used it to see photos of his great-grandchildren. One day, a phishing email tricked him into revealing the password to the trust’s online banking portal. Thankfully, the bank flagged the unusual activity, but the incident triggered a full investigation by the SSI administration. They questioned whether Old Man Tiber had the capacity to manage assets, and his benefits were temporarily suspended while they reviewed the situation. It was a stressful period for the family, and the cost of legal counsel to demonstrate his lack of capacity and reinstate benefits was substantial. They eventually succeeded, but it highlighted the vulnerability of relying on outdated or insecure systems.
How can a trust properly implement digital security measures and avoid issues?
To ensure smooth implementation and avoid complications, the trust document should explicitly authorize expenses for digital security measures, including software, hardware, and IT support. A detailed record of all expenses should be maintained, and it’s crucial to ensure the beneficiary isn’t directly accessing or controlling the encrypted data. The trustee or a designated representative should manage the encryption keys and access. My client, Mrs. Abernathy, came to me after her son, David, received a substantial inheritance. David has Down syndrome and relies on SSI. We meticulously drafted a trust that not only protected his benefits but also funded ongoing IT support and robust encryption for all his digital records – medical, financial, and personal. The trust agreement clearly outlined the trustee’s responsibility to maintain data security and regularly update the encryption software. It provided peace of mind, knowing that David’s sensitive information was protected, and his benefits were secure. This proactive approach demonstrates responsible trust administration and avoids potential issues with benefit eligibility.
“Protecting a beneficiary’s digital footprint is as vital as safeguarding their physical assets,” says Steve Bliss. “It’s an often-overlooked aspect of special needs trust administration, but it’s becoming increasingly critical in today’s digital world.”
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
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● Compassionate & client-focused. We explain things clearly.
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Map To Steve Bliss Law in Temecula:
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
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Feel free to ask Attorney Steve Bliss about: “What’s the difference between a will and a trust?” Or “What is summary probate and when does it apply?” or “Can retirement accounts be part of a living trust? and even: “Is bankruptcy a good idea for small business owners?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.