Planning to provide support for the futures of our loved ones is what estate planning is all about. We want to leave this world knowing that we have done everything we can to take care of our family’s future. Every person and family has different circumstances and needs. Some of us have family members with special needs and worry about who will take care of them later on. A special needs trust can be a valuable estate planning tool in these circumstances. Unique Estate Law is a firm that believes in creating customized estate plans because we know that everyone is unique.
Benefits of Using a Special Needs Trust
A special needs trust gives you the ability to provide for a special needs child or a special needs adult who is receiving government benefits. If you leave your money to that person outright, the government can take those benefits away. The Medical Assistance program is Minnesota’s Medicaid program that provides health insurance coverage for people with disabilities. Eligibility is based on financial need and takes into account an individual’s income level as well as the worth of their assets. A special needs trust would not be included in the person’s assets or income calculation. This means that he or she could receive support from the trust while keeping their government benefits.
It is important to note, however, that the established trust meets the requirements of a special needs trust in order to be excluded as an asset for someone receiving assistance under the Medical Assistance program.
Trustee of Special Needs Trust
To establish a special needs trust, you must select a trustee. The trustee maintains the trust for the sole benefit of the beneficiary, the special needs individual. The trustee is responsible for managing the money held in trust. He or she will distribute the funds to pay for goods or services not covered by government assistance programs. The money must go directly to the entity supplying the goods or services and not to the beneficiary directly.
The trustee must adhere to the terms of the trust and must make an accurate account record of all trust related transactions. A special needs trust may be court supervised in which case an annual accounting is required. Even if the trust is not court supervised, a beneficiary can request an accounting at any time.
With a special needs trust, the beneficiary cannot have control over the trust. The trustee must be in complete control of the amount and timing of asset distribution. If the beneficiary has the power to demand the trustee to make distributions, government assistance is put in jeopardy as the trust funds could be included in income and asset calculations for government benefits.
Trusted Estate Planning Attorney
A special needs trust is a valuable estate planning tool that can provide immeasurable peace of mind. Establishment and maintenance of such trusts are intricate and legally sensitive.
If you are interested in having an estate planning consultation, contact us today by filling out a contact form or calling us at (952) 260-2043 with any questions you might have. Feel free to check out our fees page for pricing information.