Special Needs Trusts
When you have a loved one with a disability, proper planning for their care is essential. A special needs trust is a planning tool that allows for families to ensure their loved one will receive the care he or she requires.
Generally, the main goal of a special needs trust is to maintain a special needs individual’s eligibility for means tested government assistance, including Medicaid and Supplemental Security Income (SSI). Anyone with loved ones on these programs knows how important it is that they maintain their eligibility. If a special needs person has too many assets, they will be unable to qualify for the benefits.
Special needs trusts come in two different types – First Party and Third Party trusts. The main difference between the two is who is funding the trust. With a First Party Special Needs Trust, the special needs individual’s own assets are the funding the trust. In contrast, someone else’s assets are used when funding a Third Party Special Needs Trust.
A properly drafted Special Needs Trust allows a trustee to carry out the purpose of the trust and make sure proper administration is followed. The trustee should have a good awareness of governmental benefits and what types of purchases are allowed under the programs. Typically, a trustee will use the funds in the trust to pay for services for the beneficiary, including, but not limited to, education, caregiving and medical services.
If you need legal assistance in the creation or maintenance of a special needs trust, schedule a consultation with an estate planning attorney at Bagwell Holt Smith P.A.