Special-Needs Trusts: An Overview of a Useful Estate-Planning Tool
In planning one’s estate, one seeks to make one’s passing easier, financially, logistically, and emotionally, for loved ones. In planning for the future, you likely have given special consideration to loved ones who would not be able to provide for themselves if you were gone, such as minor children.
While children eventually grow up, some conditions and disabilities that prevent a person from working or living independently can be lifelong. While Social Security and other government programs can provide an income for persons unable to work, these benefits are often not enough to cover the cost of living, such as rent, groceries, and special medical expenses such as adaptive technology and in-home assistance.
Worse still, inheriting property can make a disabled person ineligible for Social Security benefits.
This is where a special-needs trust comes in.
What Is a Special-Needs Trust? Who Can Benefit from One?
Like all trusts, a special-needs trust holds property on behalf of a beneficiary. The beneficiary does not own the property, nor does the beneficiary have to pay taxes on income earned by assets held in the trust. By careful planning, a special-needs trust can provide for all of a disabled survivor’s needs. For example, a trust can own a property—such as a family home or an accessibly-designed condominium, in which the beneficiary is entitled to live, eliminating the need for rent, while providing for the maintenance of the property through the trust’s other assets. A trust can also be set up to provide a set monthly income that will not jeopardize the disabled person’s eligibility for government benefits.
Anyone can set up a special-needs trust, not just a parent or caretaker of a disabled person, on behalf of a disabled loved one, whether a blood relation or not.
How Can I Set Up a Special-Needs Trust for My Loved One?
Like all estate-planning decisions, the choice to set up a special-needs trust is best made well in advance of it being needed. Our team of experienced attorneys can help you identify your assets and the best ways in which to prepare them to be passed on to your loved ones. If you are considering a special-needs trust, or have other questions about your estate planning, give our office a call today.