A great way to protect the wellbeing of family and loved ones is to create a will and designate assets to certain beneficiaries. That way, the people you care about will be taken care of after you pass away. This seems simple enough, but what about when you have a family member or loved one who has special needs, a disability or is elderly?
In this situation, merely creating a will may not be sufficient to protect your loved one. If someone in your life has special needs and you would like to provide for their future, you may want to create a special needs trust.
What is a special needs trust?
A special needs trust is a type of trust made for a beneficiary who is elderly, disabled or has special needs. This trust is designed to consider the unique needs, lifestyle and future of the beneficiary. Sometimes it is used to make sure that a beneficiary does not lose their government benefits; sometimes it is used to protect the assets bequeathed to someone who has special needs.
Why create a special needs trust?
One advantage of a special needs trust is that it can protect a beneficiary’s Medicaid, Supplemental Security Income, and other government-funded assistance. If someone who has special needs is bequeathed a sum of money, it can disqualify them from receiving their government benefits. But because a special needs trust is controlled by a trustee, the assets won’t affect the beneficiary’s eligibility for assistance programs.
How does the beneficiary access the trust?
If a trustee gives the beneficiary money directly from the trust, it can threaten the continuation of government benefits. Instead, it is wise to have the trustee purchase goods and services on the beneficiary’s behalf. These can include personal care attendants, medical supplies, vacations and physical therapy.
What about a pooled trust?
In a pooled trust, a nonprofit organization pools money from multiple families or donors and provides it to several beneficiaries. The nonprofit even appoints a trustee for each trust account. This can be a good option for someone who is unable to decide on an appropriate trustee.
If you are interested in creating a special needs trust for a family member or loved one, you can contact The Law Office of Amy B. Van Fossen, P.A. to discuss your options with an experienced attorney.