As anyone with a special needs person in their life might already know, there are a lot of details and things that need to be done in order to protect and care for your loved one in the best way possible.
If you happen to have a loved one with special needs and you don’t have a Special Needs Trust set up, they may face challenging obstacles or even lose benefits in the event of your death, or loss of ability to continue to care for them.
WHO QUALIFIES FOR A SPECIAL NEEDS TRUST?
- Someone who is disabled or with permanent special needs
- Someone who cannot manage their own finances
- Someone who may or may not need disability benefits now or in the future
- Underage 18/21
- Over age 65
A Special Needs Trust (SNT) is a vehicle through which you can allocate and manage assets,benefits or income for a person with special needs under your care.
In the event of your passing, leaving a gift within a will or non-SNT trust may affect your lovedones’ ability to qualify for government benefits that will be necessary throughout their lives. By creating a Special Needs Trust you are able to protect the benefits and any inheritance that may be left behind for your loved one to ensure they are probably cared for.
When you are caring for someone with a disability or special needs and you begin to plan for the future, there are several questions that may arise:
- How do you minimize income taxes on inheritance and government benefits?
- Who files the income tax return?
- Who is responsible for ensuring that my loved one is taken care of?
Typically, when creating this type of trust you will set an appointee, or trustee, who will be in charge of administering the assets and is legally obligated to execute the terms of the trust agreement after your passing.
Mostly any type of property can be held in a Special Needs Trust, and anyone (except the beneficiary) can contribute to it. For instance, if an entire family wants to contribute to a trust, that’s perfectly fine and will still be administered by the grantor (you) or the trustee you appoint to take over after you’ve passed.
Choosing a trustee is important, as they will be fully in charge of the funds that will support your loved one without jeopardizing their eligibility for other government benefits. Their job will be to use the funds to pay for things like caregiving and livelihood that are not covered by government benefits, travel, and personal services (internet, cleaning service, cell phone, etc.).
Is your loved one with special needs protected? It’s never too late to set up this common and incredibly helpful legal document to protect your family.
Reference: alllaw.com “How A Special Needs Trust Works”