When planning for the future, it’s essential to understand what you can do to care for your loved ones. Though it may seem as simple as leaving all your assets to your loved ones in a will, this isn’t always the case. If you have family members with special needs, leaving assets can disqualify them from receiving government benefits. As such, you’ll need to explore your estate planning options to help protect all of your loved ones. Luckily, you can look into establishing a special needs trust with the help of PA trust attorneys.
What is a special needs trust?
A special needs trust or supplemental needs trust allows a person with disabilities to receive inheritance gifts without disqualifying them from governmental assistance programs. This helps improve the quality of life for your loved ones, as they can still receive the assets you intended to leave them without losing the benefits that help them live their life.
Since this is also referred to as a supplemental trust, it’s vital to understand that this is not supposed to supplant your loved one’s benefits but add additional advantages. These trusts can help fund other services like hobbies, counseling, and recreational activities for the individual with special needs.
What else should I know about this option?
When you create a special needs trust, you must establish a trustee. This person is responsible for managing and overseeing the funds and assets within the trust. It is important to note that they may also be allowed to make decisions regarding the funds if it is in the best interest of the beneficiary.
These trusts are also irrevocable. As such, they cannot be modified once they are created and they are essentially invisible to creditors. This means if you are sued, the funds inside an irrevocable trust cannot be used for a settlement.
You must also establish this trust before the beneficiary turns 65, and no additional property or funds can be added to the fun after their 65th birthday. The following are examples of common assets you can place in a fund:
- Life insurance money
- Compensation from a lawsuit
- Assets retained from a divorce
Unfortunately, planning your estate can be challenging if you are unfamiliar with the laws. As you want to protect the best interest of your loved one, you must enlist the assistance of an experienced estate planning attorney. The last thing you want is to create a will under the impression that you are helping your loved one while inadvertently hurting them.
Our dedicated legal team at Friedman Schuman can help you set up a special needs trust to help you care for your loved ones after you pass. Contact us today to learn more about how we can help you through this process.