A special needs trust is a special type of estate planning document designed to help special needs individuals. It’s created specifically for those who have special needs, such as disabilities and mental impairments, that hinder their ability to work or save money. Creating a special needs trust can be quite complicated, but knowing what to keep in mind while creating a special needs trust can make it much easier.
How much you want to put into the special needs trust
There is no special formula to follow when determining how much money you should put into a special needs trust. The general rule, however, is that it should be enough so that the special needs individual will not become a burden on society or his or her family members after he or she passes away.
The most appropriate type of trust and control you need
If your special needs individual is older and receiving public benefits through SSI or Medicaid/Medicare, then a third-party special needs trust may be the best option for you. For those who are younger with disabilities but don’t receive any government benefits, a first-party special needs trust may be the best choice.
During special needs planning, you may also decide that you do not want the special needs trust to include any special terms of reference because, then, it will be solely up to the trustee as to what happens with this money. On the flip side, if your special needs individual does not receive public benefits, then you may want to include special needs trust terms of reference that will ensure the money only serves special needs purposes.
Who the trustee should be
This person is responsible for managing and distributing money from the special needs trusts according to its terms of reference. You will need to choose a special needs trustee that you trust and who understands your special needs individual’s unique situation. Additionally, you will want to ensure that the trustee is someone who can work with your special needs individual and handle his or her special needs.
Although special needs planning can be complex and difficult to understand, it is important that you do it. This will ensure your special needs individual will be cared for properly no matter what his or her future holds.
