When a person in East Hanover has a disabled or mentally ill loved one, they may want to see that their loved one obtains the government benefits needed to make ends meet. This is particularly true if their loved one does not have the ability to work or even take care of their own finances. However, depending on the government benefits, a person can only have a certain amount of assets to qualify. In situations like this, setting up a special needs trust may be appropriate.
Special needs trusts address the specific financial needs of the disabled beneficiary, while at the same time, ensuring that the beneficiary of the trust retains his or her government benefits. A loved one or even a third party can serve, as trustee for a special needs trust.
A special needs trust has a number of benefits. For example, if a person leaves an inheritance to a disabled loved one in their will, receiving those assets may make it so that their disabled loved one, no longer qualifies for government benefits. In a special needs trust, the trustee — rather than the beneficiary — retains management over how the assets in the trust are handled.
The trustee is the one who procures products and services for the beneficiary. Therefore, the assets in the trust will not be counted when it comes to determining whether the beneficiary qualifies for benefits.
As this shows, when a person has a loved one with a disability who needs another to take care of his or her finances, it may be beneficial to consider a special needs trust. These trusts can be complicated, however, and need to be worded in a specific way to be effective. Therefore, those considering a special needs trust may want to seek legal help, to ensure the trust is legally sound.
Source: FindLaw.com, “Special Needs Trusts FAQ’s,” accessed on July 31, 2017