Everything You Need to Know About Special Needs Trust Information
Do you have a loved one with special needs? If so, it’s essential to prepare for their future to ensure they receive adequate care when you’re no longer around. One way to safeguard their future is by setting up a special needs trust. Here’s everything you need to know about special needs trust information.
What is a Special Needs Trust?
A special needs trust is a type of trust set up for individuals with disabilities. The trust ensures they receive financial assistance without affecting their eligibility for government programs like Medicaid or Supplemental Security Income (SSI).
Why is a Special Needs Trust Necessary?
Suppose you have a child with special needs who receives government benefits. If they receive inheritance or insurance proceeds, their eligibility for government programs may be affected. A special needs trust protects their eligibility and ensures they receive the necessary care.
How Does a Special Needs Trust Work?
A special needs trust is set up by appointing a trustee to manage the trust’s assets on behalf of the beneficiary. The trust’s assets are distributed to the beneficiary to provide financial assistance without impacting their eligibility for government benefits.
Types of Special Needs Trusts
There are two types of special needs trusts:
First-Party Trusts
A first-party trust is funded by the beneficiary’s assets or inheritance. This trust is also known as a self-settled or d4a trust.
Third-Party Trusts
A third-party trust is funded by a third-party for the benefit of the beneficiary. This type of trust is also known as a d4c trust.
Benefits of a Special Needs Trust
Here are some benefits of setting up a special needs trust:
Protects Government Benefits Eligibility
A special needs trust ensures that the beneficiary can receive their government benefits without affecting their eligibility.
Provides Financial Assistance
A special needs trust provides financial assistance to an individual with disabilities without impacting their eligibility for government programs.
Care and Support
A special needs trust ensures that the beneficiary receives adequate care and support, even in the absence of their primary caregiver.
Conclusion
In conclusion, setting up a special needs trust is critical to secure the future of a loved one with disabilities. It provides essential financial assistance without impacting government benefits eligibility. With the right trustee, you can ensure your loved one’s care and support, even in your absence. Speak to an estate planning attorney to get started on setting up a special needs trust today.
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