A special needs trust can help ensure the financial security of your loved one who lives with special needs or a disability. If you expect that your loved one will encounter expensive medical treatment, rehabilitative care, or special dietary needs throughout their lifetime, a special needs trust can provide the funds your loved one needs to pay for their long-term care.
If the instance occurs in which your relative who is the beneficiary of your special needs trust dies unexpectedly or prematurely, the funds in the trust will be diverted accordingly. Learn what happens to a special needs trust when the beneficiary passes away.
The Basics of a Special Needs Trust
There are two different types of special needs trusts: first-party special needs trusts and third-party special needs trusts. A first-party special needs trust is funded by the beneficiary themselves, while a third-party special needs trust is funded by a family member of the beneficiary.
Special needs trusts ensure your financial assets are properly handled for the beneficiary in order to maximize their financial well-being. They are a good option for those who can expect to undergo expensive medical treatment throughout their lifetime.
Sadly, beneficiaries of a special needs trust may pass away unexpectedly before the assets in the trust have been distributed to them. Depending on whether the trust is a first-party special needs trust or a third-party special needs trust, the funds in the trust will be diverted differently in the event of the beneficiary’s death.
With a third-party special needs trust, you are not required to use the remaining assets to reimburse any states for the Medicaid benefits received by the beneficiary during their lifetime. With a first-party special needs trust, on the other hand, all trusts must specify that upon the beneficiary’s death, all amounts remaining in the trust are first repaid to any state Medicaid programs the beneficiary received during their lifetime, even to the extent of fully exhausting the remaining SNT assets.
Want to Establish a Special Needs Trust? Contact Us Today
Establishing a special needs trust for your loved one who lives with a disability does not have to be complex. At Legacy Enhancement Trust, we can help you decide upon the trust that fits the unique needs of you and your loved one. We provide the same services as a large bank or trust company, but with a level of tailored service these larger corporations cannot match.
Contact us online or by phone today at (888) 988-5503 to learn how we can assist you.