A special needs trust is a way to ensure your loved ones who live with a disability are cared for throughout their lives. This type of trust is designed specifically for disabled individuals and will allow them to receive funds from any legal settlements or inheritances while still receiving their governmental assistance. Get the facts on the different types of special needs trusts, their benefits, and why you should establish one.
Different Types of Special Needs Trusts
There are several different types of special needs trusts. Determining which one is best for you and your family will help ensure your loved ones are well-cared for.
Three types of special needs trusts include:
- Third-party special needs trust. This type of special needs trust is used by people planning in advance for a loved one with special needs. Any direct family member can establish this type of special needs trust for their loved one with a disability. If this type of special needs trust was established as part of a person’s Last Will and Testament, the funds are granted to the beneficiary upon the death of the person who established the trust. If the trust is established as a stand-alone trust, multiple people may contribute to the trust and the funds may be made available before the death of the person who established the trust.
- First-party special needs trust. This type of trust is most often used when the person with a disability inherits money or property or receives a court settlement. Since December 2016, federal law allows a mentally and legally competent special needs trust beneficiary to establish an individual first-party special needs trust, which is funded with property that belongs to the beneficiary. Funds and property included in this type of trust can only be created and used for the “sole benefit” of the beneficiary.
- Pooled special needs trust. This type of trust differs from the first two in that it is typically managed by a non-profit association for the benefit of several beneficiaries. Pooled special needs trusts contain an account established for the sole benefit of an individual with disabilities by the parent, grandparent, legal guardian, the individual personally, or the court.
The Benefits of a Special Needs Trust
Special needs trusts help ensure your loved ones who live with a disability have the financial security they need to live safe, healthy lives. They provide funds for future expenses while maintaining the person’s eligibility for necessary governmental programs and benefits. In a special needs trust, you may allocate funds for the beneficiary’s nursing care, medical appointments and medications, dental expenses, rehabilitation programs, and more.
Unlike other trusts or financial planning tools, a special needs trust allows the beneficiary to qualify for Medicaid, the State Medicaid Waiver Program, Supplemental Security Income, and other private care programs.
At Legacy Enhancement Trust, we can help you establish a special needs trust that will provide the support and security your loved one needs. We have an experienced team that is:
- Knowledgeable about various income and asset-related agency rules.
- Capable of working with Medicaid and SSI on your behalf.
- Attentive to the unique needs of disabled individuals and their caregivers.
- Dedicated to easing the financial responsibility of beneficiaries and their loved ones.
Don’t Wait—Establish a Special Needs Trust Today
It’s a smart idea for people of any age to establish a special needs trust for their loved one who lives with a disability. At Legacy Enhancement, our goal is to ease the burden of financial management and help our clients retain the governmental assistance they need.
Interested in establishing a special needs trust for your loved one? Contact Legacy Enhancement Trust at (888) 988-5503 to get started today.