Special Needs Trust
Special Needs Trust
If you have a loved one who has special needs, then it is important to plan for their future. A Special Needs Trust (SNT) can create funds that are set aside specifically for your loved one’s care and well-being. This article will explore the basics of what this type of trust entails, how it protects assets from being spent on medical expenses, and why an SNT is such a valuable asset in planning for your loved ones’ futures.
At the Manassas Law Group in Virginia, we have extensive experience in the area of special needs trusts. We can help you create a comprehensive plan that will protect your loved one’s assets and ensure they are cared for in the event that their guardian passes away. Using our advanced experience and knowledge, we work to get you the results you seek. To arrange a consultation with us, call our office at 703-361-8246 today.
Special Needs Trust FAQs
Q: What is a Special Needs Trust?
A: A Special Needs Trust is a trust that is set up to provide financial assistance for a person with disabilities. The money in the special needs trust can be used by beneficiaries or by their parents/guardian as they see fit, so long as it does not jeopardize government benefits such as Supplemental Security Income (SSI). SNTs operate as a common estate planning technique intended to shelter the assets of the beneficiaries without disturbing their needs-based benefits. These trusts are irrevocable, which means that the terms are not subject to modification, amendments, or termination without the permission of the grantor.
Beneficiaries of these trusts generally have physical or mental disabilities that qualify them for needs-based benefits such as Medicaid. Simply giving them money or making them an heir disqualifies them from receiving these benefits. As a solution, Special Needs Trusts were created to hold assets for these people while still allowing them to receive benefits. Basically, these trusts allow you, the grantor, to look out for the beneficiaries of the trust by ensuring that they receive proper care and quality of life.
Q: How Does a Special Needs Trust Differ from a Regular Trust?
A: The main thing that SNTs and regular trusts have in common is that they are simply types of trusts. However, the regular or living trust acts more like a will. Living trusts are created by living people and establish a trustee to manage assets. A living trust also determines who the beneficiaries of that trust are and whether the trustee holds the assets before or after the grantor’s death. A special needs trust, on the other hand, provides assets and resources specifically to care for a disabled person.
Q: What Types of Special Needs Trusts Are There?
A: Two main types of special needs trusts exist. These types are third-party trusts and first-party trusts. Both have their own distinct features and advantages, depending on your specific situation. Before trying to set up your trust, speak with our experienced estate planning attorneys at the Manassas Law Group. We’ll help you determine which plan is best for your situation.
Here is a further outline of the details of each type of special needs trust.
Third-Party Special Needs Trust:
Many people who want to plan in advance for their loved ones with special needs or disabilities opt for this type of SNT. In most cases, a parent of someone with disabilities or special needs establishes the trust. However, grandparents, siblings, or other people aside from the beneficiaries are able to establish them as well. Individuals may also include these third-party SNTs in their will.
Notably, when the beneficiary of a third-party trust dies, it is not necessary that the SNT uses the remaining assets to reimburse states for Medicaid benefits. Therefore, this type of SNT serves as a highly useful estate planning tool. It allows the grantor to have full control over where the assets go when the beneficiary dies.
First-Party Special Needs Trust:
Most of these NFTs are used when someone with a disability or special needs inherits money or receives money from a settlement. Some people may not have special needs prior to the creation of this NFT. For example, if a person experiences a traumatic car accident that alters their brain function and leaves them disabled, they might receive money from a settlement to put toward a first-party SNT. They might also have assets in their name and later need to qualify for government benefits like Medicaid. First-party SNTs are funded with that individual’s own assets and property.
After the death of the first-party SNT’s beneficiary, any remaining amounts within the trust go toward repaying the state that provided them with Medicaid services. This can be equal to the total lifetime amount of benefits, but not exceed it. It could also drain the rest of the SNT. Once the Medicaid payback finishes, any remaining funds are distributed to other beneficiaries.
Pooled Special Needs Trust:
Individuals use these to establish both third-party and first-party SNTs. However, they are established and managed by non-profit organizations and benefit multiple beneficiaries.
Q: What are the Advantages of Special Needs Trusts?
A: These types of trusts have multiple benefits for both the grantor and the beneficiaries. Below, we explain the reasons why we might recommend these trusts to our clients.
- An SNT allows beneficiaries to use their trusts without losing their qualification for needs-based government benefits.
- The trustee is chosen by the grantor, so you can rest assured that they will have your loved one’s best interests at heart. Think of this trustee as the manager of a sort of safety barrier, as they protect the assets and strive to better the life of your loved one.
- These trusts protect your assets from waste, theft, or abuse.
- You can opt into an additional layer of protection by appointing a trust protector. A trust protector will usually still look out for the beneficiary, but will not be the trustee. They monitor the decisions of the trustee and maintain the right to remove and replace them if necessary.
If You Need a Special Needs Trust Lawyer, Call Manassas Law Group Today
If you need help setting up a special needs trust for your loved one, look no further than the qualified attorneys at the Manassas Law Group. In cases where your main concern is the future and well-being of your loved one, we’re always here to help. The process of setting up an SNT can be complex, but having a special needs trust lawyer can make it significantly easier. To arrange a consultation with our trusted attorneys, call 703-361-8246 today.