Special Needs Trusts

As special needs planning attorneys, we work with clients to understand and implement planning tools to accomplish their goals. Special Needs Trusts are one of those tools. A Special Needs Trust is used for a disabled or elderly person who would like to qualify for government benefits, such as Medicaid, Supplemental Security Income, or other public benefit program, but has too many resources. The assets in the Special Needs Trust may be used to provide for needs that are not already provided through government programs.

There are different types of Special Needs Trusts, including:

• Pooled Trust – when you create a pooled trust, you are placing your assets into a pool of investments with other disabled or elderly individuals and asking a professional trustee (nonprofit organization) to manage the assets for you.
• “First Party” Trust – when you create a “first party” trust, you are placing assets into a trust that belong to an individual with a disability who is also the beneficiary of the trust. Only a competent beneficiary, parent, grandparent, guardian, or Court can establish this type of trust. The beneficiary must be under the age of 65 at the time the trust is created.
• “Third Party” Trust – when you create a “third party” trust, you are placing assets that belong to a person other than the individual with a disability into a trust for that individual’s benefit. Anyone except the person with the disability can create this type of trust.

There are many legal requirements for the creation and administration of a Special Needs Trust. To make sure that a Special Needs Trust is properly drafted and implemented, a special needs planning attorney can help.

Special Needs Planning Tools

Special needs planning requires a person to put careful thought towards the details of the plan for their loved one. Consideration should be given not only to special needs trusts, but also to other details, including:

• ABLE Accounts – individuals who were disabled prior to turning age 26 can qualify to create an ABLE account. These accounts can receive gifts up to a certain amount and be used as a way to build savings for the person with a disability. There are specific requirements for these accounts.
• Professional Supports and Services – it is important to give thought to things such as where your loved one will live and what services they will need. Special needs planning can involve creating connections with professionals who can assist with all aspects of a person’s life.
• Family and Friend Support – when planning for the future of a person with a disability, it is important to create a plan that will not over-burden family members or friends, takes advantage of the skills and strengths of the people willing to assist, and if possible, equally divide responsibilities.