Special Needs Trust
If you have a family member who has special needs, you may worry about how they will support themself after you are gone. While individuals with special needs can receive benefits through Medicare or Supplemental Security Income, many parents choose to give their special needs children additional financial support through a special needs trust.
Contact our Bassett Murray law group today to learn more about setting up a special needs trust.
What Is a Special Needs Trust?
A special needs trust is a legal agreement that holds assets for a person with a physical or mental disability. This trust gives the person access to funds that they can use for a range of uses.
The primary purpose of special needs trust is to provide funds to people who receive Supplemental Security Income or Medicare benefits without disrupting their benefit eligibility. Government benefits typically have an asset limit. Therefore, if a person makes too much money or has too much in savings, they may not qualify for the necessary benefits.
As a result, their family members may give them money in a special needs trust. The funds in the trust do not impact their benefit eligibility, allowing them to continue receiving SSI and Medicare.
Individuals may also set up special needs trusts to ensure a person with disabilities has access to funds after their parents pass away. The parents can designate a successor trustee who will be responsible for managing the trust after the parents die.
Types of Special Needs Trusts
There are two main types of special needs trusts:
- Self-settled special needs trusts: Trusts that contain funds that the trust beneficiaries have the right to possess. For example, these funds may come from a lawsuit surrounding an incident that created the disability. The funds in this trust can only be used for the benefit of the person with disabilities.
- Third-party special needs trusts: Trusts that contain funds from someone else’s assets, such as a family member or friend. The family gifts the money to the trust for specific purposes to avoid interfering with the person’s government benefits.
How Can the Funds of a Special Needs Trust Be Used?
The funds from a special needs trust can cover expenses outside of what Medicare and Supplemental Security income cover. These governmental benefits typically pay for food, shelter, and medical care. As a result, individuals can use special needs trusts to pay for:
- Recreation expenses
- Phone bills
How to Establish a Special Needs Trust
Creating a special needs trust involves several steps. While some special needs trusts are straightforward, many involve complex components. At Bassett Murray Law Group, we can help you with the following steps to create a special needs trust:
- Create the trust document.
- Establish a grantor, trustee, successor trustee, and beneficiary.
- Sign and notarize the trust agreement.
- Establish a trust bank account.
- Transfer assets to the trust.
Contact Our Experienced Special Needs Trust Attorneys Today
Our attorneys have extensive experience in special needs planning. Contact our team at Bassett Murray Law Group today at 734-930-9200 to schedule a consultation.
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