What Is A Special Needs Trust
Finder Law Serves Clients Across Jefferson City, Columbia, and Central Missouri
If someone in your family has a disability, a special needs trust may be the best way to provide care and support for them once you are unable to yourself. Estate planning is a complex process and there are many different options for how to transfer assets to others during your lifetime and upon your death.
A trust is a way for someone planning their estate to determine how they want their assets disbursed but does so by appointing a third party. A special needs trust does the same thing a normal trust would do, but it is specifically for the benefit of someone who is disabled. This document will name a trustee who will make decisions about when and how assets are disbursed to your loved one. Having a trust in place can be a way to reduce stress you may have thinking about what may happen to this person after you are no longer here to take care of them.
By putting your assets in a trust, this will not impact your loved one’s ability to qualify for Medicaid or other social services. Often those benefits are based on financial need and giving them all your assets directly could disqualify them from those programs. The trustee instead will oversee these assets and be able to disburse them as necessary, but still allow your loved one to receive public assistance.
Instead of naming your loved one as the beneficiary of your estate, the special needs trust would instead receive your assets upon your death. This keeps the value of the estate from being considered when your loved one applies for social services. The person named as the trustee should be someone you trust who will oversee the trust once it is created. If you do not name someone specifically, the court will appoint someone.
If you or someone you love is already named as the beneficiary of assets and wants to put them in a special needs trust, this can be accomplished by creating a self-settled special needs trust. Unlike a normal trust, beneficiaries of special needs trusts will not have to repay the assistance they received during their lifetime like they would if they were direct beneficiaries of a trust.
It may be scary to think that your trusts’ assets are in the hands of someone else rather than your loved one, but the purpose of a special needs trust is the same as a normal trust- to take care of them once you are unable to do so. Although there are some limits on how the trust assets can be used, you may allow the trustee to use assets to purchase medical equipment, health insurance, life insurance, home health care, or other services not paid for through other sources.
The process of creating a special needs trust can be complicated and overwhelming, but by hiring an experienced estate planning attorney, they will be able to guide you through the process. You should not try to create these documents on your own. Daniel Finder at Finder Law, LLC has over a decade of experience in estate planning, so he is more than capable of making the planning process as easy as possible. We treat each of our clients and their needs individually, so we can create a unique plan for you.
This blog is for informational purposes only and does not constitute legal advice. For specific guidance, please contact our office directly.
