Why are special needs trusts important for disabled loved ones?

by | May 24, 2019 | Disability And Long-Term Care Planning, Firm News, Special Needs |

Special needs trusts are a vehicle that protects assets that can be used to pay for certain needs of a disabled beneficiary. Gifts to the beneficiary, funds from a legal settlement and life insurance proceeds can all be part of a special needs trust. There are several reasons why some people in New Jersey decide to execute a special needs trust.

First, special needs trusts can be a means for providing assets for the support of a disabled loved one both during your lifetime and after you pass away. Second, like other trusts, a special needs trust designates a trustee to manage the funds in the trust and oversee the distribution of those funds to the trust beneficiary. This is useful if the beneficiary cannot manage the trust funds on their own. It can also ensure that trust funds are distributed for the reasons stated in the trust.

Third, funds in a special needs trust will not be counted as income when it comes to qualifying for government benefits, such as Supplemental Security Income and Medicaid. This can be very important if a person is disabled and cannot work. Normally, a disabled person cannot have more than a nominal amount of assets to qualify for these benefits. Thus, they can be an important part of disability planning

As this shows, there are advantages to setting up a special needs trust. However, special needs trusts are complex documents and most people in New Jersey do not have the experience necessary to properly execute such a trust. Fortunately, elder law professionals are available to answer any questions and assist in the execution of a special needs trust.