If you are a parent to a loved one with special needs, you may be wondering how to make sure that their affairs are well taken care of after you are no longer able to provide for them. Creating a special needs trust (SNT) can be a crucial step in providing for their financial security and quality of life.
An SNT is a legal arrangement designed to hold and manage assets for a beneficiary with special needs. Benefits include the following.
Legal protection of assets
Assets placed in an SNT are shielded from seizure by creditors or in the event of a lawsuit. This legal protection keeps the funds designated for the beneficiary secure and prevents them from being diverted due to financial or legal disputes.
Continued eligibility for government programs
One of the key benefits of a special needs trust is that it enables the beneficiary to receive essential financial support while still qualifying for government social support programs like Medicaid or Supplemental Security Income (SSI).
Financial support for specific expenses
The trust creator can dictate how the funds are used, ensuring they cover specific expenses as intended. This control allows for tailored financial planning, enabling the trust to address the unique needs of the beneficiary effectively. By defining the terms of the trust, the creator can provide assurance that the financial support will be allocated in a way that aligns with their wishes and the beneficiary’s requirements.
Flexibility in fund allocation
A special needs trust offers flexibility in how funds are allocated, allowing adjustments based on the beneficiary’s evolving needs. This adaptability ensures that the trust can accommodate a range of expenses and changes over time, whether for new medical treatments, living arrangements or other needs.
To set up a special needs trust properly, it is essential to seek legal support to make sure that all terms and provisions are clearly defined and comply with applicable laws.
