Being aware of the legal documents in place for special needs adults is extremely important for individuals with disabilities as well as their families. Having access to this information will allow individuals to know their rights and the rights of their families in regards to financial, medical, and other matters.
A special needs trust, also sometimes referred to as a supplemental needs trust, is typically put in place for those with disabilities to receive funds while also remaining eligible for government benefits. There is more than one type of special needs trust, so it’s important for individuals with disabilities and their family members to be aware of what type of trust will work best for their specific situation.
Although not every situation qualifies or allows for a trust to be put in place, special needs trusts can be extremely beneficial for those who have them. Each individual’s situation is different, but there are many reasons to consider choosing a special needs trust.
It’s very common for parents to leave their children or other loved ones with an inheritance of some sort, if such an inheritance is available to be passed on. Because special needs individuals can be the ones who inherit these assets, they may become ineligible to receive government benefits such as Medicaid. However, with a trust in place, parents are able to leave behind a trust for their loved one, allowing government benefits to be used and collected.
Parents of special needs children should absolutely consider a special needs trust if for no other reason than that it can protect a disabled child during divorce cases and custody disputes. If parents are considering a divorce, having an SNT in place will help provide the child support needed for any disabled children.
While it may be uncomfortable to discuss what should happen if you and your spouse should choose to divorce, it’s far better to be financially prepared should such a situation arise than to avoid important discussions which can lead to more complications and disagreements down the road.
Another issue that families may run into is the distribution of wealth. Regarding special needs children and wealth distribution, things can get even trickier. Some may be concerned that with the death of a parent, wealth may not be distributed evenly among all children. If this is the case, consider a special needs trust. Having a special needs trust in place could help prevent the uneven distribution of wealth by ensuring each child or designated party is represented fairly following the death of a loved one.
As mentioned, there is more than one type of special needs trust, making it easier for individuals in different situations to have an option ideal for their circumstances.
A first party SNT can be used for a variety of different reasons. First party SNTs are unchangeable and set in place by close family members such as a parent, guardian, or grandparent. First party trusts are funded by the beneficiary’s assets. A few reasons to consider a first party SNT might be:
Because they benefit both the disabled individual as well as other family members, third party SNTs have advantages over other trusts. These are normally set up and managed by a donor who wants to help a disabled individual along with their family members. Because the trust is not funded by the beneficiary’s assets, they may not have any Medicaid payback after the donor passes.
Pooled special needs trusts are slightly different from first party and third party trusts in that they are organized by nonprofit organizations. For individuals who are interested in setting up a trust for a disabled family member who cannot decide on a trustee or who do not have the means to provide for a trust, pooled trusts may be the answer.
Many people choose pooled trusts because individuals who run them have typically been in their situation caring for a disabled loved one and are seeking to help others. The knowledge that comes with this empathy makes the managers running the trusts more reliable and trustworthy to concerned family members.
Choosing to not write a will has the potential to cost your loved ones a lot of hassle and trouble following your death. An inheritance of any type of asset can cause government aid to be taken away, even if the assets will not sufficiently provide for the individual. Putting a special needs trust into your will can save your family and loved ones a lot of worry and stress in the future.
With the help of a professional, you can write a will that provides for your special needs family member. It’s important to know the details behind the complexity of a will, especially if you are providing for a disabled individual. By including a special needs trust in your will the correct way, you will avoid future confusion and worry for your loved ones.
The individuals who work and volunteer at The Baddour Center are passionate about caring for those with special needs and their families. We understand planning for the future of your loved one can be overwhelming, and we want to help ease that process in any way possible.
If you are looking for more information about the work we are doing or how to stay involved, contact us today. To visit our facility, schedule a tour here.