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Understanding special needs trusts

On Behalf of | Sep 20, 2024 | Trusts

When you care for a loved one with special needs, planning for their future becomes a top priority. One powerful tool that could help secure their financial well-being is a special needs trust. Understanding the nature of these trusts and how they can benefit your family is essential.

What is a special needs trust?

A special needs trust is a legal arrangement that aims to provide financial support for individuals with disabilities without jeopardizing their eligibility for government benefits. These trusts allow you to set aside money and assets for your loved one’s care while ensuring they can still qualify for programs like Medicaid and Supplemental Security Income (SSI).

You might wonder why you cannot leave money directly to your family member. The answer lies in the strict asset limits many government assistance programs impose. A special needs trust helps navigate these restrictions, allowing your loved one to maintain their benefits while still having access to additional resources for their care and quality of life.

What are the key benefits of special needs trusts?

Special needs trusts may benefit your family by:

Preserving government benefits

Keeping assets in a trust rather than your loved one’s name helps maintain their eligibility for crucial programs.

Offering flexibility

You could use the trust for various expenses not covered by government benefits, such as education, entertainment or specialized medical equipment.

Giving you peace of mind

You can rest assured knowing that your loved one will have financial support even after you are no longer able to provide care.

How do you set up a special needs trust?

Creating a special needs trust requires careful planning and legal expertise. You may need to:

  • Choose a trustee to manage the trust.
  • Decide what assets to include.
  • Establish clear guidelines for the use of the funds.

Consider collaborating with an attorney experienced in special needs planning to ensure the trust is set up correctly and complies with all relevant laws and regulations.

A special needs trust is more than just a financial tool. It is a way to provide for your loved one’s future and ensure they have the resources they need to thrive. Setting up one may protect their benefits and enhance their quality of life for years to come.