In today’s fast-paced environment, it is paramount to be prudent and make plans in advance. Everything around us is evolving, and time never remains constant for anyone. One can never predict how things will turn out tomorrow. As parents, we plan out everything for our children from present to future. Through using a special needs trust, you may ensure the protection of property and funds of children with disability.
Special Needs Trusts are for people with specific physical and psychological disabilities. They are also for people having chronic illness. Disabled children require special attention, care, and planning by parents and loved ones.
Things to Know Regarding Special Needs Trust
A Special Needs Trust, also known as supplemental needs trust, is a legal arrangement. It allows people with physical or mental ailments to receive income without narrowing down their eligibility for the public assistance disability benefits. These benefits are generally provided by Supplemental Security Income, Social Security, and Medicaid.
There are certain needs which the public assistance disability benefits do not cover. Special Needs Trusts cover this percentage of a person`s financial needs. The proceeds from Special Needs Trusts cover medical expenses, transportation costs, payment for caretakers, and other permitted overhead expenses.
Benefits of Special Needs Trusts
- It benefits both the parties, i.e., the beneficiary and the one who creates the trust
- A beneficiary can receive financial support without jeopardizing the public assistance disability benefits
- The executor has some reassurance that the proceeds will go as per his/her stipulations
- It can be more difficult for the creditors or the winner of a lawsuit to seize the assets held by the Special Needs Trust
Types of Special Needs Trusts (SNTs)
There are two types of SNTs, generally known as first-party SNTs and third-party SNTs. It is necessary to determine which one you need to have or already exists.
- First-Party SNT: The party funding the SNT originates with the beneficiary
- Third-Party SNT: The property funding SNT belongs to someone other than the SNT beneficiary
A person planning in advance for their loved ones with special needs generally use third-party SNTs. However, first-party SNTs are typically employed when a person with a disability inherits money or property outright.
It’s tempting to assume that a disabled child will grow out of the condition or the medications will fix the issues. Nevertheless, it’s essential to consult a health technician and develop realistic expectations about the child’s long-term capabilities and estimate his likelihood of living or thriving independently.
As a parent, we know that you won’t be around every time or for good to take care of your child. Thus, it becomes crucial to consult a Special Needs Trust attorney and consider the helpful strategies for your loved ones well-being. Visit the Kania Elder Law website today and let the professional attorneys know about your situation to get valuable feedback and suggestions.