Many of us have loved ones with special needs. Caring for a special needs family member is an important, life-long responsibility. Making sure they receive continued care once you’re gone is equally important. Today we will explore why setting up a special needs trust may be a good option for you.
A special needs trust can be set up as part of your estate plan. It works like a regular trust—in that a third-party trustee is responsible for managing the assets of the trust on behalf of a beneficiary. However, a special needs trust is carefully designed to meet the needs of a beneficiary with special needs.
One reason it can be advantageous for a beneficiary with special needs to receive inheritance through a special needs trust rather than through a will is to protect their other benefits. It is common for people with special needs to receive government benefits such as Medicaid and Supplemental Security Income as well as subsidized housing. If such a person inherits a large sum of money in a will, this income could make them ineligible for continued benefits.
Under the conditions of a special needs trust, the beneficiary cannot receive funds directly. However, the trustee—who is often a family member—can use trust funds to make a wide range of purchases for the beneficiary. Such purchases are not limited to basic needs such as food, shelter and healthcare but can also include expenses such as hobbies, education and vacation.
It should be noted that drafting a special needs trust on your own is a risky endeavor. There are many finer details of such a trust that must be in place—otherwise it can fail to provide the protections you intend. To ensure that your trust provides the appropriate legal safeguards for your love one, it is important to enlist the help of an attorney experienced with special needs trusts.