Special Needs Trust Planning – Protecting the Future of Your Loved One

A trust is an important part of anyone’s estate plan. Simply put, trusts are a legal document that allow a third party (called a trustee) to hold and control assets in a trust fund on behalf of a beneficiary. Often, families use trusts to protect inherited wealth as they pass it down from generation to generation. However, there are other valuable uses for a trust as well – especially if you have a family member with special needs.

Although you can gift money and assets to your loved one with special needs to provide them with the care they need, this can actually backfire. Leaving assets to them in a will or providing them with a great deal of money can prevent an individual with special needs or disabilities from qualifying for essential Social Security Income (SSI) and Medicaid benefits. And, though your family member needs these benefits, it’s also a fact that those benefits cover only the bare necessities.

Naturally, you want to ensure that your loved one is provided for in your estate plan. You also want to ensure that they don’t lose any of their existing benefits. The best way to do this is to hold the assets in a trust, typically called a Special Needs Trust. Following are some common questions and answers about special needs trusts.

Our family is wealthy. Do we really need a special needs trust?

Yes, you should strongly consider it. Aside from the fact that none of us can predict the future, a special needs trust protects the beneficiary from both potential creditors and predators, and allows them to enjoy a higher quality of life. For example, if your loved one is involved in a personal injury lawsuit as a defendant, the money in the trust cannot be accessed by the plaintiff.

Further, because the assets in a trust aren’t counted when determining your loved one’s government benefits, more of their personal money and wealth can be used for quality of life. This means they can utilize their Social Security and Medicaid benefits for the care they need and deserve, but still enjoy a meaningful life.

When should I consider a special needs trust?

Typically, you should establish a special needs trust before the beneficiary’s 65th birthday. If your family member is disabled or has a serious chronic illness, you may want to draw up this trust when your child is young. Many children with special needs are the recipients of gifts and donations (or even settlements from malpractice or injury lawsuits) and having a special needs trust in place means the assets go directly to the trust without disrupting any government benefits.

Who can create a special needs trust?

Most special needs trusts are established by parents on behalf of their disabled children. However, any third party can create this type of trust for a beneficiary. We highly recommend using an experienced family law attorney to draft a trust, as a poorly-executed document may not protect your loved one for the government or Social Security Administration. Qualified counsel can ensure your trust is written thoroughly and bullet-proof.

At Epperson Law Group, PLLC, we have your family’s best interests in mind. When you need help with your estate plan, will or trust, look to us for experienced guidance. Call us in Charlotte, Boone, or Weddington at 704-321-0031, or visit our contact page, and schedule your consultation.