If you have a loved one with special needs, setting up a trust for them can be the best way to ensure that their financial needs are met when you are gone. However, not all trusts are suited for this job. A special needs trust is what you need.
Special needs trusts are unique compared to other types of trusts, making them ideal under these circumstances. Here is what you need to know.
Special needs trusts are irrevocable
For starters, special needs trusts are irrevocable. This is important because the terms of the trust cannot be altered or revoked once it is created. You do not have to worry that someone will change it when you are no longer around.
In addition, irrevocable trusts are separate legal entities. As such, the assets held in the trust cannot be transferred or sold even in the event of a divorce or to recover a debt owed by the beneficiary since they legally belong to the trust.
Your loved one will still be eligible for government support
A special needs trust does not affect your loved one’s eligibility for government support programs like Medicaid or Supplemental Security Income (SSI). This is because proceeds from a special needs trust only go towards covering specific expenses not covered by public assistance payments such as travel, recreation and entertainment.
Your loved one will still qualify for government support benefits when needed. Being the beneficiary of funds from a traditional trust or designated in a will disqualify them.
Are you thinking of setting up a special needs trust?
Every detail matters, from your choice of the trustee to the legal intricacies of setting up a valid and legally enforceable trust. Therefore, it is best to seek experienced legal guidance from an estate planning attorney to help ensure you do everything by the book and protect your loved one’s interests for life.