Special Needs Planning is estate planning designed to protect the financial, medical, and psycho-social well-being of a Person with Special Needs. If you have a loved one with special needs, you are probably aware that he or she must have very limited resources and income to maintain eligibility for much needed public benefits such as Medical Assistance and Supplemental Security Income.
Many parents and grandparents either leave inheritances outright to their loved one with special needs or disinherit their loved one altogether. Neither of these methods are beneficial since an outright gift will cause a loss of public benefits eligibility and disinheritance leaves the person with special needs out of the family assets.
Trust planning provides a means to include your loved one with special needs in family gifting and inheritance while preserving his or her eligibility for public benefits. There are several different types of trusts and accounts that can be used to accomplish these goals. The plan that will work best for your family will depend on your specific circumstances. A Certified Elder Law Attorney can create an estate plan for you and your family to meet the needs of your loved one with special needs.
TYPES OF SPECIAL NEEDS TRUSTS
Third-Party Special Needs Trust
Provides a means to make gifts during lifetime or leave an inheritance at death for the benefit of a person with special needs. The Third Party Special Needs Trust can be established by anyone other than the beneficiary with special needs. The Third Party Special Needs Trust must be funded with assets originally owned by someone other than the person with special needs. This type of Trust can be established during your lifetime or upon death under your Last Will and Testament. You can also name whomever you choose as beneficiary of the trust proceeds upon the passing of the person with special needs.
Self-Settled Special Needs Trust
Provides a means to create a supplemental fund for the benefit of a person with special needs while preserving eligibility for needs- based public benefits. The Self-Settled Special Needs Trust can only be established by the parent, grandparent, or guardian of the beneficiary with special needs or by Court order. This type of Trust is funded with assets originally owned by the person with special needs. The Self Settled Special Needs Trust must contain a provision providing that the Department of Human Services will be paid back all Medical Assistance spent on behalf of the beneficiary from the assets remaining in the Trust at the death of the person with special needs.
