A special needs trust is a way of providing current and future support for a loved one. People who cannot live independently and manage their own finances may benefit from the creation of a special needs trust.
There are numerous ways in which funding a trust can support a family dealing with a challenging medical situation. The benefits below make a special needs trust one of the best tools for addressing cost-of-living expenses and other financial obligations.
1. The ability to retain state benefits
If the person with special needs eventually receives a large inheritance, that windfall could affect them ineligible for benefits that they rely on for housing, income and medical coverage. Trusts with proper limitations on distributions allow beneficiaries to retain key benefits.
2. Asset protection
Children and other family members with special needs often end up in vulnerable positions if creditors and other interested parties file lawsuits against their caregivers or take legal action during estate administration. The loss of resources due to creditor claims can leave people with medical challenges in an especially vulnerable situation. Trusts can help protect resources from creditor claims and probate complications.
3. The support of a trustee
When a parent or other caregiver dies or becomes incapacitated, a person with special needs might struggle to manage their own affairs. The trustee named to manage the resources in a special needs trust can provide both practical and social support for a beneficiary struggling with abrupt changes.
Creating a special needs trust can provide parents and caregivers with a sense of security and can offer lasting benefits. A lawyer can help to ensure that a special needs trust has adequate funding and structure that reflects the needs of the beneficiary and their caregivers.
