Special Needs Trusts: What You Need to Know
If you are providing support and care for an individual with a mental or physical disability, you want to ensure your loved one will continue to be cared for after you are gone. Unfortunately, naming a disabled person as an heir in your will could make his life harder. Receiving a lump sum inheritance without the ability to manage financial affairs may lead to misuse of funds and puts the heir at risk of financial abuse by dishonest caretakers. Additionally, many disabled individuals are dependent on government assistance programs like Medicaid and Supplemental Security Income (SSI). Inheritance funds are considered resources that may disqualify your loved one from his means-based benefits.
Fortunately, a special needs trust may be a workable solution. A special needs trust (SNT) provides a way to bequeath assets to an individual with a physical or mental impairment. The trust is managed by a trustee who uses the funds to purchase necessities and other expenses for the beneficiary. A major benefit to establishing an SNT is that the assets are not included as resources for SSI and Medicaid recipients.
Who Can Benefit from a Special Needs Trust?
Special needs trusts are intended to help individuals with profound mental and physical disabilities that are unable to manage their own finances. Being young, irresponsible, or simply “bad with money” does not make a person an ideal beneficiary of a special needs trust. There are other types of trusts that may be suitable for these individuals. Placing property in an SNT solely to protect an individual’s means-based benefits may not be the best option either, because it does not allow the beneficiary any control over how the funds are used.
A special needs trust can be costly to set up and maintain. There is no minimum investment required to create a special needs trust, but it may not be the ideal option for smaller estates. Often, special needs trusts are managed by professional trustees, but an SNT can also be managed by a trusted family member or friend of the family.
Estate Planning Attorneys in High Point, NC
To find out if a special needs trust is a good option for you, contact the estate planning attorneys at McAllister, Aldridge & Kreinbrink, PLLC. Our firm is well versed in estate planning and special needs law, and we can assist you every step of the way. To schedule your confidential consultation, call our office in High Point, NC at (336) 882-4300 or submit a contact request form on our website.