What is a Special Needs Trust?
A special needs trust, as the name implies, is a trust that has been established for the benefit of an individual who has a disability. Almost always, a special needs trust will be a living trust. However, such trusts have been created as part of a last will and testament in certain instances.
The goal of a special needs trust is to protect a disabled person’s ability to continue receiving Medicaid and Supplemental Security Income (SSI) benefits from the government. Monetary assets affect these benefits, a fact that prevents such individuals from inheriting or holding large sums of money. A special needs trust works by establishing a trustee who is able to administer the trust’s funds on the beneficiary’s behalf. Because the disabled beneficiary does not control the trust his or herself, eligibility for Medicaid and SSI is not affected.
As you might guess, this makes the role of the trustee especially important. The trustee should be someone who is trustworthy and has the disabled beneficiary’s best interests at heart. This trustee will not be able to pass monetary assets directly to the beneficiary. Rather, they are granted the power to spend the trust’s funds to purchase goods and services that the beneficiary might need.
How to Set Up a Special Needs Trust?
The estate planning attorneys at Clear Counsel Law Group will help you establish the type of special need trust that is appropriate for you. To qualify for a special needs trust individuals must be developmentally disabled or have a mental or physical impairment. Once the need has been determined, the attorneys will work with you on the specifics:
First-Party Special Needs Trust - this type of trust is often set up using money from an inheritance, gift, or settlement. In other words, a First-Party Special Needs Trust is for people looking to set up an irrevocable trust with their own assets.
Third-Party Special Needs Trust - For those who are disabled or impaired but do not have thier own assets to fund a trust, a third-party special needs trust is usually the best fit. This type of trust has no age restrictions and is funded by parent or relatives of the loved one with special needs. It enriches the life of the beneficiary, while preserving their ability to access governmental benefits.
We are dedicated to helping all those with special needs protect their legal rights to benefits and interests. To schedule your initial consultation please contact our law firm today.
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