Create a 3rd-Party Special Needs Trust in Ann Arbor, MI
Providing for the future of a child or dependent family member with special needs involves unique challenges. You may wonder who will take care of your loved one after you’re gone, how to supplement their income or how to leave an inheritance to your child without making them lose eligibility for public benefits.
Call our team at Bassett Murray Law Group, PLLC, at 734-930-9200 to learn how a third-party special needs trust can provide financial security for disabled individuals in Ann Arbor, MI.
What Is a 3rd-Party Special Needs Trust?
A third-party special needs trust, also known as a supplemental needs trust or SNT, is a type of trust that holds and distributes assets for the sole benefit of the trust beneficiary—i.e., the person with the special needs. The person who creates the trust (grantor) is typically the beneficiary’s parent, grandparent, or another relative.
The funds in a third-party SNT come from someone other than the beneficiary, unlike in a first-party SNT, which receives funding from the disabled person’s own money.
The trust must follow complex Medicaid and Social Security regulations so that the disabled person will continue to qualify for benefits, which is why it’s so important to work with an experienced estate planning lawyer when setting up a 3rd-party special needs trust.
The Benefits of a 3rd-Party SNT
A properly established 3rd-party special needs trust can:
- Supplement the beneficiary’s needs by using it for items or services that government benefits don’t cover, allowing for a better quality of life
- Preserve the beneficiary’s eligibility for Medicaid and SSI, since trust assets don’t count as the beneficiary’s own assets for government benefit purposes
- Protect the beneficiary’s property from Medicaid claims
- Give the beneficiary’s family priceless peace of mind that comes from knowing that their loved one will receive proper care even after they pass away
How Does a 3rd-Party SNT Work?
Here are some key points you should know about third-party special needs trusts in Michigan:
- An independent trustee manages trust funds. The beneficiary can’t have direct access to trust assets, so you must appoint a reliable, competent independent trustee to cover the beneficiary’s expenses from trust funds.
- A third-party SNT may have restrictions on allowable expenditures. Allowable expenditures typically include expenses that are not otherwise covered by the governmental benefits. Using the SNT for certain expenses, such as rent, could result in a lowered governmental benefit. Consult your special needs planning attorney to find out what an SNT can fund.
- After the beneficiary’s death, any remaining funds in the SNT can pass to residual beneficiaries, like the primary beneficiary’s siblings, other family members, or charities.
Bassett Murray Law Group, PLLC: Estate Planning and 3rd-Party Special Needs Trusts in Ann Arbor, MI
Do you have a special-needs child or dependent? Consider a third-party special needs trust and other special needs planning strategies to protect your family member’s finances in years to come. At Bassett Murray Law Group, PLLC, we will tailor your estate plan so it’s easier for you to secure your loved one’s future.
To talk to a special needs planning attorney in Ann Arbor and Washtenaw County, MI, call us at 734-930-9200 or contact us online.