Who Benefits from a Special Needs Trust?

A special needs trust can be established to benefit any age group—from small children to senior citizens. Special needs trusts can secure the financial well-being of people with a wide array of disabilities and additional needs, from an elderly relative who needs support round-the-clock for memory issues to an adult child who cannot work due to cerebral palsy, to name just two examples.

Most commonly, a special needs trust is set aside to support someone receiving government entitlements, whether that be healthcare (like coverage from Medicare or Medicaid) or direct payments (like Social Security disability payments). The goal of a special needs trust is to ensure the well-being of the beneficiary after the death of a caretaker, without jeopardizing the beneficiary’s eligibility for essential payments and services from the government.

Who Can Set Up a Special Needs Trust?

Anyone who loves a person with a disability, whether or not they are directly involved as caretaker or guardian, can set up a special needs trust. Caretakers, parents, grandparents, and spouses have all established special needs trusts to ensure that, even after their own deaths, their disabled loved ones continue to receive care and comfort.

One of the blessings of having worked so hard through your life is being able to leave something for your friends and family, particularly those who face additional vulnerabilities. A special needs trust is an effective way to memorialize your love and care.

How Does a Special Needs Trust Work?

Like all trusts, a third party acts to safeguard and administrator funds set aside by the grantor, the person establishing the fund, on behalf of a beneficiary. In the case of special needs trusts, the beneficiary is the person receiving government benefits due to age or disability.

Because the disabled person has no control over the assets placed in trust, the value of these assets does not count against eligibility for entitlement programs. In this way, special needs trusts are a form of asset protection tailored to people living with disabilities.

Assets enter a special needs trusts either through a bequest in a will or through transfer from a revocable living trust. These assets can be both liquid (cash held in bank accounts for example) or tangible (real estate, jewelry).

The funds held in trust then can be used to pay for expenses not covered by government benefits, like additional in-home health aides, or to provide a higher quality of life than a loved one would otherwise enjoy.

Is a Special Needs Trust Right for Your Estate?

If you worry about who will take care of your disabled loved one after you are gone, a special needs trust might be the estate-planning tool to put you at ease. Set up an appointment with one of our experienced attorneys to discuss all the details of your particular situation. Today, we can set up a trust that best serves you and your loved ones’ needs.

The Power of Trusts
A guide to trusts for asset protection, estate tax avoidance, and legacy management

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