As with any type of trust, a special needs trust is created when someone identifies property to be managed by someone else for the benefit of named beneficiaries. In the case of a special needs trust, the beneficiary usually has a disability that makes the beneficiary unable to manage his or her own money independently.
If you would like to provide financial assistance to someone with special needs, then a trust may be a useful legal tool for achieving your goal.
Benefits of a Special Needs Trust
While each situation is unique, the following are some potential benefits of a special needs trust:
- A special needs trust may allow the beneficiary to continue benefiting from government assistance programs. If the beneficiary qualifies for Medi-Cal, Supplemental Security Income (SSI), or other government benefits that are based on income, then the beneficiary may still continue to qualify for those benefits even if a special needs trust is established. It is the trustee, not the beneficiary, who has control over the trust assets. Therefore, the assets will not be considered for government assistance program eligibility. However, if you were to make a gift outright or leave a direct bequest in your will, then the beneficiary would own the property outright, and the recipient might be ruled ineligible for government assistance programs.
- Someone else is in charge of the money. The trustee will make decisions about how the assets of the trust are invested and dispersed to the beneficiary.
- You can decide how and when the beneficiary benefits from the trust. The terms of the trust, for example, could require that the trust money be used for necessities, for recreation, for medical care, or for a combination of things.
It can be scary to think about what will happen to your loved one with special needs after you are gone. It is essential to be prepared, to think about all possible contingencies, and to continue to help your loved one for a long time to come.
As with any type of trust, it is important to talk to an experienced estate planning lawyer before deciding whether or not to set up a special needs trust. Please contact us today via this website or by phone to schedule a free, confidential, no-obligation consultation about your unique needs.