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Important Factors in Drafting a Special Needs Trust

If you have a family member with a disability of some kind, you may wish to set up a special needs trust as part of your estate planning efforts. It’s important to understand what one of these trusts can do for individuals who need extra support on an ongoing basis.

A special needs trust is created through the same means as any other trust. Parents or guardians may establish it during their lifetime or through their will. Selecting a trustee for a special needs trust arguably the most important factor involved in creating this type of document. The trustee will be responsible in the ongoing and detailed management of the trust. In addition to managing the financial assets of the trust, the trustee will also be responsible for keeping up to date on all Supplemental Security Income (SSI) and Medicaid laws to prevent the beneficiary from being deemed ineligible for government assistance.

Other duties of the trustee may include filing tax returns, recordkeeping and completing annual reports for government-funded aid on behalf of the beneficiary. Finally, it is the duty of the trustee to terminate the trust when appropriate. 

Ensuring support is available

Often, individuals with lifelong disabilities are unable to fully provide for themselves. A special needs trust provides financially for a child’s wellbeing long after the parents or guardians have passed away.

A critical advantage of creating a special needs trust is that because assets are legally controlled by the trustee and not the child, the child’s eligibility for disability benefits will not be impacted by the inheritance. Conversely, if a parent were to give a lump sum directly to the child, that child would possibly no longer qualify for Medicaid or SSI benefits.

If you would like more information on creating a special needs trust for a person with a disability, contact an experienced Florida estate planning attorney at the Charles Law Offices.

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