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  May 18, 2017

special-needs-child.jpgTrusts are an excellent tool to provide for the future needs for yourself or your loved ones.

A trust can be especially beneficial if you have children with special needs, including minor children and adult children with disabilities. You can also create a trust for yourself if you need to apply for Medicaid and your assets exceed the limits to qualify.

Here are a few types of special needs trusts you can use in your estate planning.


What Is A Special Needs Trust?

A special needs trust is a trust set up to provide for taking care of medical and personal care, expenses, and management of assets for a person with special needs or a disability.

Special care must be taken when drafting such trusts to ensure the person does not lose eligibility for government benefits.

Types Of Trust For Special Needs

Special needs trusts fall into two categories: general support and supplemental care.

1. General Support Special Needs Trust

A General Support Special Needs Trust acts as the primary source of benefits for an individual with special needs. Special care must be taken with this type of trust in order to prevent your loved one from being disqualified from Medicaid, SSI or a state benefits program.

2. Supplemental Care Special Needs Trust 

A Supplemental Care Special Needs Trust is more common than the General Support Special Needs Trust. It provides supplemental funds over and above any government benefits. This type of trust will not interfere with receipt of needs-based assistance for your loved one.

Ways To Create Special Needs Trusts

The first way is to include the trust provisions in your will. Secondly, you can also name a special needs trust the beneficiary of life insurance, which would require a separate trust agreement.

The third way to create a special needs trust is a “living trust” agreement. This creates and funds the trust while you are alive rather than only becoming effective upon your death. The living trust helps provide for your special needs loved one during your lifetime.

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The other way special needs trusts are created are through court-ordered proceedings. A court can set up a special needs trust for the recipient of an inheritance or court settlement. What’s different about a court-ordered special needs trust is that the beneficiary owns the funds, subject to the terms of the trust ordered by the court.

As you can see, special needs trusts are extremely complex and require the expertise of a skilled estate planning attorney. In order for the trust to be successful, it should include clear-cut language and provisions that protect the beneficiary’s entitlement to benefit programs.

If you need to create a special needs trust for your loved one(s) with disabilities, contact Adair M. Buckner, Attorney at Law. Adair takes special care when drafting special needs trusts to help ensure your loved ones are properly taken care of. Contact Adair today to set up a free initial consultation* to discuss your estate planning needs.

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*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)

Article Topics:
Estate Planning Wills & Trusts