When you have a loved one with special needs, understanding what you can do to help care for them is critical. Unfortunately, many are unaware of the options out there and end up leaving their loved one asset in a will, which can be a disservice to those with special needs. If you’re interested in learning your legal options, the following blog explores what you should know about these special needs trusts, if these are revocable, and why it’s in your best interest to establish one with the assistance of PA trust attorneys.
What are special needs trusts?
Special needs trusts are an essential estate planning tool used to help those who need additional assistance. Many special needs individuals qualify for government assistance programs that can help improve their quality of life. These programs can include Medicaid, housing, and Social Security income. However, individuals must qualify for these programs.
As such, if you leave your loved one assets in a will, for example, you’ll find that this can actually disqualify them from benefits. However, by creating a special needs trust, you can help support them without disqualifying them from their necessary programs. For example, if you create a trust, the trustee responsible for managing the trust can use the funds to help pay for classes, hobbies, and other living expenses.
Are these revocable?
When looking at special needs trusts, it may be confusing as you’ll likely hear the terms “first-party” and “third-party.” Generally, a first-party special needs trust is irrevocable. This is established when the individual with additional needs establishes the document themselves to help ensure they can still qualify for government benefits. Once this is created, it cannot be altered. Many with special needs create these after they become disabled to protect their funds from creditors or lawsuits.
However, if you establish a special needs trust for your loved one, this is a third-party trust. These are revocable, meaning you can alter and change the terms and conditions of the document as you see fit. It’s important to understand that the terms and conditions of a special needs trust must be carefully established in order to ensure none of the funds used are considered gifts.
As you can see, ensuring that you take the time to create this trust to benefit your loved one with special needs is imperative. If you are interested in establishing this kind of trust, the team at Friedman Schuman Layser can help. We understand that protecting and providing for your family is critical, which is why we can help you establish peace of mind that your beneficiaries will have the funds they need to succeed. If you’re ready to establish a special needs trust, contact us today to learn how we can assist you.
