The Special Needs Trust

Leaving an inheritance to a disabled loved one can be a tricky thing to do. On the one hand, you want to provide for them as best you can. But leave behind too much, and you risk endangering their eligibility for important government assistance programs such as Supplemental Security Income and Medicaid.

But with a Special Needs Trust you might be able to avoid some of the problems that an inheritance can create for a disabled person receiving benefits.

A Special Needs Trust allows you to leave property to the trust instead of directly to the disabled beneficiary. With this type of trust you will need to name a trustee that will oversee the trust and spend the money on the beneficiary for what they need. Due to the fact that the beneficiary will not have direct control over the money, Social Security will not count it against their eligibility. The trust will last as long as it is needed; when the money is gone or the beneficiary dies, the trust will end.

How Can The Trust Money Be Spent?

Although the trustee cannot give money directly to the beneficiary, they can spend the money to pay for home health care or personal assistants, vacations, medical expenses, clothes, education, and more. Just keep in mind that if the trust purchases something that requires a deed or a title, it must be in the trust’s name, and not the beneficiary’s name.

Who Should Be Trustee?

Choosing a trustee for a Special Needs Trust is important; the person you choose will have to be someone that you can trust completely. This is especially important if the beneficiary is mentally handicapped and will not be able to recognize if there are any problems with the trust. Most people will choose a parent or sibling of the disabled person to act as trustee, but you can name anyone you want to be trustee.

No one wants to pass over a loved one just because they are disabled and receiving government benefits, and if you go through a Special Needs Trust you won’t have to.

Author Bio

Catherine Hammond is the CEO and founder of Hammond Law Group, a Colorado-based estate planning law firm she founded in 2005. With a strong focus on protecting families from the legal consequences of disability and death, she creates comprehensive estate plans that minimize taxes, costs, and government interference.

A native of Denver, Catherine completed her undergraduate studies at Coe College in Iowa, and her Juris Doctorate from the University of Denver College of Law in 1993, concentrating on estate planning, tax, and mediation. Catherine is a member of various professional organizations, including WealthCounsel, ElderCounsel, the National Academy of Elder Law Attorneys, the Colorado Springs Estate Planning Council, and the Purposeful Planning Institute. Beyond her legal expertise, Catherine provides transformational coaching to support clients and their families through life transitions.

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