Planning beyond the typical estate plan is necessary for a loved one with unique needs. To help provide for your loved one after your passing, you may choose to establish a special needs trust (referred to as a supplemental need trust in some states). Special needs trusts are employed, who should create one, why, and how do they differ from ordinary beliefs?
What is a Special Needs Trust?
A special needs trust (SNT) is a particular kind of trust designed to care for a disabled person without endangering that person’s eligibility for future government assistance or long-term care benefits. Please make sure you are dealing with a knowledgeable estate planning attorney who can help with the formulation, execution, and eventual management of this sort of trust because the definition of a disabled person and someone with special needs differs from state to state.
Special needs trusts differ from
standard trusts are intended to supplement, rather than replace, government benefits. To best protect the beneficiary, these trusts must meet specific requirements. Again, these can vary state by state, but in general, the following requirements must be met:
- Funds in the special needs trust may not be directly available to the beneficiary.
- The beneficiary cannot revoke the trust.
- The individual with special needs must be considered “permanently and disabled” under Social Security Insurance criteria. Note that these rules differ between adults and children.
- The trustee may not be permitted to make payments or distributions that may interfere with government benefit eligibility.
Why are Special Needs Trusts Used? And Why Are They Important?
SNTs are used in a little bit different circumstances than a standard trust would be used for your children or heirs, as was already mentioned. An SNT contains specific, limiting language to prevent distributions that might unintentionally bar your child or beneficiary from receiving the government benefits to which they are legally entitled.
Special needs trusts are important because they can help to augment your beneficiary’s quality of life. Government benefits can only provide so much, and the SNT and its trustee can step in and expand the resources required to cover your beneficiary’s care needs.
How Does Mission Wealth Help with Special Needs Trusts?
To guarantee that your beneficiary and their long-term care are supported, you must have a trusted advisor you can work with given the intricacy of special needs trusts, both on the writing and administration sides. To better understand your requirements and aspirations, our Mission Wealth advisors first get to know you and your family. To implement and execute your trust, we can connect you with the top lawyers and corporate trustee services thanks to our extensive experience and relationships. Mission Wealth may manage your legacy as it is used to care for your beneficiaries, both now and in the future, as your family’s principal point of contact.
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