A special needs trust is a legal document that helps provide for a person with disabilities. Trust can be used to pay for things the person needs, but it can also help the person keep their government benefits.

A family member or friend sets up a special needs trust. The money in the trust can come from many sources, such as an inheritance or a settlement from a personal injury lawsuit.

The trustee is responsible for ensuring that the money in the trust is used for the benefit of the person with disabilities. The trustee can also help ensure that the person with disabilities keeps their government benefits.

Who can benefit from a special needs trust?

A Special Needs Trust (SNT) is a trust created to benefit a disabled person. The SNT can be used to pay for the unique needs of the beneficiary that are not covered by government benefits, such as Medicaid.

Many people with disabilities can benefit from an SNT. For example, people with physical or mental disabilities that prevent them from working may rely on government benefits to cover their basic needs. However, these benefits often don’t cover extras like medical equipment, therapy, or even housing modifications. An SNT can be used to cover these costs and improve the quality of life for the beneficiary.

People with disabilities are not the only ones who can benefit from an SNT.

How does a special needs trust work?

A special needs trust is set up to provide financial security for people with special needs without jeopardizing their eligibility for government benefits. The trustee manages the assets in the trust and uses them to supplement the beneficiary's income and cover any expenses not covered by government benefits.

A special needs trust can be used to pay for medical care, housing, education, and transportation. It can also be used to cover the costs of recreation and other activities that improve the quality of life for the beneficiary.

What are the advantages of a special needs trust?

A Special Needs Trust (SNT) is a type of trust that can be used to provide for the care of a disabled person without impacting their eligibility for government benefits.

SNTs can supplement government benefits, which may not be enough to cover the total cost of care. SNTs can also be used to pay for items and services not covered by government benefits, such as therapies, equipment, and housing.

SNTs can provide peace of mind for both the disabled individual and their loved ones. SNTs can ensure that disabled individual has the resources they need to maintain their quality of life, even if their caregivers can no longer provide support.

What are the disadvantages of a special needs trust?

There are a few potential disadvantages to setting up a special needs trust for a loved one with disabilities. First, it can be expensive to set up and maintain trust. Additionally, the trustee may have significant control over how the trust funds are used, limiting the beneficiary's independence. Finally, if the beneficiary does not use all the funds in the trust before they die, the leftover money will go to pay back any government benefits that were received rather than to heirs or other beneficiaries.

A Special Needs Trust can be a vital tool for protecting the financial future of a loved one with special needs. When properly established and managed, a Special Needs Trust can provide for the unique needs of a beneficiary with disabilities while preserving government benefits.

A Special Needs Trust can be an essential part of an overall estate plan but working with an experienced attorney is important to ensure the trust is properly created and funded. Alta Estate Services is an excellent resource for those considering a Special Needs Trust as part of your estate planning.

Mark Fishbein, Tucson Estate Planner of Alta Estate Planning Services is an excellent resource for those considering an Estate Plan, Family Trust, Will, Medical Power of Attorney, or business licensing assistance. Follow Mark Fishbein on Facebook.