Special Needs Trust
Special Needs Trust Attorney Near Me
Maybe you’ve been anxious about the well-being of your loved one living with a disability. You want to be rest assured that their health and welfare needs will always be met. A Special Needs Trust is an effective way to ensure that your loved ones are cared for, even when you are no longer around.
What is Special Needs Trust?
A Special Needs Trust is a legal means to provide funds for your loved one(s) with a disability while preserving their eligibility for important government benefits.
It is a good strategy to secure the financial future of your loved one with special needs.
How does a Special Needs Trust work?
Medicaid is one of the only ways for people with disabilities to get health coverage. But Medicaid offers benefits only to people whose income or assets remain below a certain limit ($1,500).
What if you want to leave assets over that amount to your loved one without jeopardizing their eligibility?
Setting up a Special Need Trust handles your trust assets, without having them count towards the resource limit for Medicaid or Supplemental Security Income (SSI) eligibility.
SSI and Medicaid will exclude the trust because your loved one will have no control over the money.
This means that they could stay on Medicaid and still have access to funds, giving them the opportunity to improve their quality of life.
You can create separate trusts for different types of funds:
- “First-Party” funds are trusts that are funded directly by your disabled loved one. They are used to hold assets that they may have received from inheritance or a lawsuit.
- “Third-Party” funds are trusts that are funded by a family member - usually as a part of the family member’s Estate Plan.
You must understand the type of trust you want to create, to enable you to secure the maximum benefit for your loved one while still complying with federal laws.
What Are The Benefits?
- Special Needs Trust Funds can provide financially for your loved ones without having any negative effect on government aid.
- Special Needs Trust cannot be revoked. The fund in the trust can’t be seized by creditors or by a lawsuit. The trust ends typically, at the beneficiary's death or when the trust funds have all been used up.
- Your chosen trustee cannot give money directly to your loved one but will be in charge of spending money on their behalf. You have some reassurance that the money will be used for its intended purpose. Commonly, you could potentially use the trust fund for permitted expenses, such as:
- Medical Expenses
- Out-of-pocket dental expenses
- Personal care attendants
- Pet care
- Transportation costs
- Vacations
- Home furnishings
- Education
- Clothing
- Computer or phone
- Physical rehabilitation
- Home Services – cleaning, Internet
Proper Estate Planning for your loved one with special needs can go a long way to ease your mind, as you can be confident that you’ve done everything in your power to protect them.
How do I set up a Special Needs Trust?
Your Special Needs Trust can be funded with cash, retirement plan benefits (IRAs, 401ks), property, investments, life insurance or with ‘first party’ funds.
Setting up a Special Needs Trust is a simple process:
- You start by creating a Trust Document as the Settlor (or Grantor) who provides the fund and sets up the Trust.
- You will assign a Trustee who will have control over the assets in the Trust. It is important to choose someone who has a good relationship with the beneficiary to serve as a trustee - a sibling or close family friend.
- You will name the person with special needs as the Beneficiary of the trust.
- You will then sign the trust into effect.
However, you should consider seeking professional advice from a Special Need Attorney because there are laws that regulate the process of creating a special needs trust.
Do I need a lawyer to draft my Special Needs Trust?
Information on the Internet might have made it look easy to create one. Nonetheless, If you can afford a lawyer, you should use one. If you happen to be in Scottsdale or Phoenix Arizona, RJ Sanders Law will draft a trust designed to meet your beneficiary’s evolving needs. You want to ensure that your trust is valid and compliant with federal and state laws.
Spending the time and mental energy to do it right can be tasking, the rules can be a little complicated. You should consider hiring RJ Sanders Law today to help take the burden off your shoulders.