If you or a loved one is approaching a season of life where they need ongoing assistance, or if you have concerns about your loved one’s provision after you are gone, you should consider what a special needs trust may have to offer. In very basic terms, a special needs trust allows a person to receive benefits from the trust so that he or she does not exceed the income caps on receiving government benefits. For many individuals, government benefits make life possible, where paying for ongoing expenses entirely out-of-pocket would quickly exhaust available resources.
When a special needs trust properly protects assets, the beneficiary may enjoy a number of advantages without jeopardizing government assistance. The trust may payout a certain amount of money per month and may also pay for certain expenses for the beneficiary. This may even cover luxury expenses, in some cases.
In order to use a special needs trust, the beneficiary must usually face some sort of disability. In some cases, disability status is not an issue where a person qualifies to receive certain benefits. Without a special needs trust, a person may have to divest him or herself of much of his or her property so that he or she does not exceed the limits to qualify for certain assistance. Some individuals may find it very difficult to maintain a reasonable standard of living altogether without proper estate planning.
If you believe that you might benefit from a special needs trust, an estate planning attorney can help you assess your greatest needs and strongest options, while protecting your priorities along the way.
Source: Findlaw, “Types of Trusts,” accessed Nov. 03, 2017