Special Needs Trust: Your Will and Trust Should Have Language to Plan for a Disability

 Posted on December 14, 2022 in Estate Planning

What is a Special Needs Trust?

A special needs trust is a great option for those seeking to ensure the financial support of a loved one and should be included in every person’s will or trust. A special needs trust will not only protect a loved one that is disabled at the time the will or trust is executed, but it also is effective in the event that a loved one, who was not disabled at the time it was executed, later becomes disabled.

A special needs trust provides financial support for the designated beneficiary with special needs. At the same time, the income from the trust will not impact the beneficiary’s eligibility for government assistance programs (such as Medicare or Social Security). Proceeds from a special needs trust are commonly used for things like medical expenses, payments for treatments or caretakers, and transportation costs. Generally, government assistance programs are run on an income contingency and as a result, if that person makes over a certain amount of money, they can be disqualified from receiving those benefits. However, a special needs trust avoids this issue completely

SPECIAL NEEDS LANGUAGE IS IMPORTANT IN TRUST AND WILLS

The purpose of specific special needs language when creating a will or trust is to ensure the financial protection of a loved one, should they ever develop special needs. This language can (and should) be used at the time of creation of the will or trust, even if special needs is not anticipated at the time. An experienced and knowledgeable estate planning attorney will tell you that it is always best practice to prepare for the worst. If a loved one were to ever develop special needs or become disabled and there was no explicit language outlined in their will or trust, their wishes and needs will become vulnerable.

No two situations are the same. It is important to have a special needs trust regardless of whether you have a loved one with the disability at the time you are executing your will or trust. As mentioned earlier, a special needs trust also applies to those who become disabled even after you have executed your will or trust. It is crucial that you have a knowledgeable and experienced attorney to help you in designing your will and trust to ensure your specific goals are met and are done properly, according to the law.

How Do I Set Up a Special Needs Trust?

When preparing estate planning with Gateville Law Firm, a special needs trust will be provided in the trust document in of your will package, which will be set up by your attorney. This is why it is helpful to have an experienced and specialized attorney assist you with setting up a special needs trust. Your Yorkville Estate Planning Lawyer can customize your trust agreement to your particular situation. The purpose of a trust, in simple terms, is to assign someone (called the trustee or executor) to manage the property that you have decided to put in it, upon your passing. The person you decide to assign as trustee or executor is legally bound to the terms you specify in your trust, and they must carry it out exactly as it has been written by you

The special needs provision specifies that if a person you have named as a beneficiary to your will or trust later becomes disabled and qualifies for any governmental “needs-based” programs, your trustee has the authority to take proceeds from your estate and distribute them to the disabled individual into the special needs trust. At that point, the beneficiary will receive income from the trust. The language in this provision also specifies that the trust is to protect and preserve the governmental benefits which the beneficiary is receiving (or is qualified to receive in the future) while at the same time being able to derive any funds provided.

Who Can Create a Special Needs Trust?

Currently, there are no limitations for who may create or contribute to a special needs trust nor is there a limit to the number of trusts that may be created for a single special needs or disabled person. Your Yorkville Special Needs Attorney can assist you.

What Type of Property May Be Included in a Special Needs Trust?

There is no limitation on what can be held in a special needs trust. Typically, creators of the trust will include property such as real estate, stocks, businesses, and jewelry. There is a simple process for getting the assets into the special needs trust. This can be done by leaving the assets through a will or revocable living trust, with a special needs provision.

How is a Beneficiary of a Special Needs Trust Able to Spend Their Income from the Trust?

So long as there is no explicit language to the contrary, assets and funds in a special needs fund may be used for anything. This typically includes anything that may better the standard of living or quality of life of the beneficiary such as therapy, caregivers, household bills, clothing, furniture, and everyday household items

CALL A KENDALL COUNTY SPECIAL NEEDS ATTORNEY TODAY

Special Needs Trusts are created to ensure the quality of life we desire for the people we love. These needs are crucial to outline in your will or trust and you should discuss your options an attorney today. Hiring effective and experienced estate planning counsel is critical to ensuring your goals are met and your estate planning is done effectively. Gateville Law Firm concentrates in estate planning. Our estate planning lawyers utilize asset protection strategies to protect the economic security and peace of mind of our clients. We are eager to assist you and your family with their estate plans. Contact us today at 630-780-1034 or contact us via email.