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Information On Special Needs Trusts

January 17, 2019 in Uncategorized | MARTIN WREN, P.C. | LEAVE A COMMENT

Estate Planning

Why do you need a trust? Is a trust for everyone? If you own any type of tangible items of value, property, or finances, leaving a trust can be an incredibly beneficial thing to do. It ensures that someone you can rely on will manage your assets after you have passed away (or, in the case of a living trust, while you are still alive). However, there is a more specific type of trust called a “special needs” trust designed to help people specifically with mental or physical disabilities. This is particularly useful if the government considers them incapacitated and if they are unable to make financial and asset-based decisions on their own. When naming a trustee, you must take into consideration how responsible they are and if they are an appropriate representative for the beneficiary.

Are There Any Benefits To This Type Of Trust?

Qualifying special needs people are eligible to receive some type of government aid. This could be:

  • Medicaid
  • Subsidized Housing
  • Supplemental Security Income, or
  • Vocational Rehabilitation

When a person creates a trust and leaves assets to a loved one with special needs, this thoughtful gesture could end up hurting their loved one more than helping. If a beneficiary receives different assets or money through someone’s will, the government may then disqualify them from the above programs. If, however, you set up a special needs trust, the trustee can avoid this potential for disqualification.

Should I Still Create a Special Needs Trust If We Do Not Use These Benefits?

Even if your family does not benefit from this type of government assistance, a special needs trust works specifically to help those with disabilities while a regular trust does not. Additionally, if there is any possibility in the future that your loved one with special needs may choose to take help from government assistance, a special needs trust can ensure there are no problems.

How Exactly Does the Trustee/Beneficiary Relationship Work?

The beneficiary is unable to directly access the trust and the trustee cannot directly hand out assets or money from the trust to the beneficiary or else the government may disqualify the beneficiary from future government assistance. Instead of merely transferring assets or finances over to the disabled beneficiary, the trustee can use these assets to make intentional purchases on behalf of the beneficiary. This could come in the form of many things, such as:

  • Physical Therapy
  • Education
  • Future Medical Care
  • Personal Nurse or Care Attendant

Do I Need To Retain an Attorney For This Trust?

Like other trusts, the government does not require you to retain an attorney for a special needs trust. There is specific language that you must include in your special needs trust for it to be valid, however, and while there are many resources online and in books, having an estate planning law firm St. Peters, MO trusts on your side can be incredibly valuable since a special needs trust gets very specific. Hiring an attorney can take off a great deal of stress when it comes to preparing this trust.

 


 

Thank you to our friends and contributors at Sweeney Legal, LLC for their insight into estate planning and the importance of creating a plan.

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