Everything You Need to Know About Special Needs Trust Information
When it comes to taking care of a loved one with a disability or special needs, many families find themselves overwhelmed with the financial and legal aspects of providing for them. One of the tools available to them is a special needs trust, which can help ensure their loved one is cared for while maintaining their eligibility for important government benefits.
In this article, we’ll cover everything you need to know about special needs trust information, including what a special needs trust is, how it works, and the different types available.
What is a Special Needs Trust?
A special needs trust is a legal arrangement that allows a person with a disability or special needs to receive supplemental care without losing their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI). The trust is managed by a trustee who is responsible for overseeing the funds and using them to provide for the beneficiary’s needs.
How Does a Special Needs Trust Work?
To set up a special needs trust, a family member or caregiver will typically work with an attorney who specializes in estate planning and special needs law. The trustee is chosen and named in the trust document, and the beneficiary is also named.
Once the trust has been established, the beneficiary’s assets (such as an inheritance or settlement) can be placed into the trust. The trustee can then use the funds in the trust to provide for the beneficiary’s needs such as medical care, therapy, or home modifications.
Because the trust is managed by a third party (the trustee) and not the beneficiary, the assets in the trust do not count towards the beneficiary’s eligibility for government benefits.
What are the Different Types of Special Needs Trusts?
There are three main types of special needs trusts:
1. First-Party Special Needs Trust: This type of trust is funded with assets that belong to the beneficiary themselves, such as a settlement or personal injury award.
2. Third-Party Special Needs Trust: This type of trust is funded by someone other than the beneficiary, such as a family member or friend.
3. Pooled Trust: This is a type of special needs trust that is managed by a non-profit organization that pools the assets of many beneficiaries together for investment purposes.
Conclusion
In conclusion, a special needs trust can be an invaluable tool for families looking to provide for a loved one with a disability or special needs. By working with an attorney who specializes in special needs law, families can ensure that their loved one’s needs are met while still maintaining their eligibility for important government benefits. Understanding the different types of special needs trusts available can help families make the best decision for their individual circumstances.
