If you’re shopping for a special needs trust, you’ll likely consider the various aspects of each option to help you decide which type would be best for your situation.
As you may know, first-party special needs trusts must be irrevocable and are funded using assets that the disabled beneficiary owns.
You may be surprised to learn that a third-party special needs trust can be revocable or irrevocable and is developed and funded by the assets of someone other than the person with special needs. Read on to learn more.
A Third-Party Special Needs Trust Can Be Revocable or Irrevocable
Third-party special needs trusts offer a bit more flexibility than first-party special needs trusts as they can be revocable or irrevocable.
Revocable Trust
A revocable trust, also known as a living trust, is a trust that allows modifications to the terms at any time.
Irrevocable Trust
An irrevocable trust does not allow for changes once it is developed unless it receives consent from the beneficiaries.
Other Details About Third-Party Special Needs Trusts
Most of the time, third-party special needs trusts are established on behalf of a beneficiary with special needs by a:
- Parent,
- Grandparent, or
- Sibling.
These types of trusts are unique because a third-party—someone other than the beneficiary with special needs—uses their own funds to establish the trust. In addition, should the person with special needs lose their life and the trust is terminated, the assets within the trust do not need to be repaid to the government to reimburse them for the benefits they covered.
We’re Here to Help
If you need assistance establishing a third-party special needs trust, we can help. We have assisted many other people with their financial futures, and we will do everything in our power to help you too. Don’t hesitate to reach out to our office right away with any questions you may have.
Call Legacy Enhancement Trust at (888) 988-5503 or fill out the online contact form today to learn how we may assist you!