3 things to know about a special needs trust

On Behalf of | Mar 27, 2023 | Estate Planning |

A special needs trust is designed to provide financial support for an individual with disabilities while still allowing them to maintain eligibility for government benefits. The trust’s assets can be used to pay for expenses not covered by government programs, such as transportation, education or recreational activities.

A special needs trust can be funded with a variety of assets, such as cash, investments or real estate. It’s important to properly fund the trust and structure it to meet the needs of the beneficiary.

1. A trustee controls access to the funds

The trustee of a special needs trust is responsible for managing the trust assets and ensuring that they are used in the best interests of the beneficiary. It’s important to choose a trustee who is experienced in managing trusts and understands the unique needs of individuals with disabilities.

2. Benefit preservation is possible with the right structure

A properly drafted special needs trust can help preserve the beneficiary’s eligibility for government benefits, such as Medicaid and Supplemental Security Income (SSI). The trust assets are not counted as income or resources for the purpose of determining eligibility for these programs because the beneficiary doesn’t have control of the assets.

3. Termination clauses can help you plan for future events

A special needs trust can be terminated under certain circumstances, such as if the beneficiary no longer needs the trust or if the trust assets are exhausted. Having terminology in the trust to cover termination is crucial.

Taking the time to craft an estate plan that can care for your loved ones after your death helps to ensure you have things set up in the best manner. Discussing your wishes and your loved one’s needs with someone familiar with setting up plans for individuals who have special needs may make the process a bit easier. 

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