Including the proper documents in your estate plan can help secure your family’s future. And if you have a family member with a disability, adding a special needs trust to your estate plan is a crucial element.
What is a special needs trust?
Creating a special needs trust allows you to set aside benefits for a disabled beneficiary. Once you pass or are no longer able to care for a family member with a disability, a special needs trust provides the funds necessary to support them.
There are two types of special needs trusts — a first-party and a third-party. A beneficiary could create a first-party special needs trust if they suffered an injury that led to permanent disability. In a third-party trust, a loved one creates the trust for a beneficiary. Whichever type works best for your family, there are definite advantages of setting up a special needs trust for your loved one.
Advantages of a special needs trust
Having a special needs trust in place for your loved one can allow you to provide them with assets that will improve or continue to support their quality of life.
One of the main advantages of creating a special needs trust is that it ensures that your loved one receives the government aid they may need. If you leave assets to a disabled family member without placing them in a special needs trust, your beneficiary may not be entitled to assistance programs such as Supplementary Security Income or Medicaid. A special needs trust will allow your beneficiary to continue receiving the government support they require.
With a special needs trust, you can leave other assets for your beneficiary as well, including:
- Caregiving services
- Money for medical expenses
Legal assistance can make the process easier
While setting up a special needs trust is crucial for a family member with disabilities, it can also be complicated. An attorney with estate planning experience can help you understand the process and set up an effective plan. With a special needs trust in place, you can protect your loved one’s future and ensure they receive the care they need.