Special Needs Trusts are fantastic tools that allow the lives of special people to be enriched without putting their government benefits at risk. If you have a loved one that will likely rely on Supplementary Security Income (SSI) and Medicaid to meet his or her basic needs for the rest of his or her life, setting up a Special Needs Trust to benefit them is a good idea.
Special Needs Trusts are like a lock box that nobody but the person it was built to benefit can access. They are set up by the caretakers of individuals with a disability who rely on government benefits to meet basic needs.
These trusts are funded with gifts, inheritances, and legal settlements. Putting the money in the trust ensures the government will have a hard time taking it away, and prevents the money from being wasted.
A trustee is appointed to make decisions about what the money in the trust can be spent on, with the main restriction on their power being they have to spend the trust assets to benefit the disabled person the trust was created for.
Any disabled person that relies on government benefits to meet their basic needs can be the beneficiary of a special needs trust.
A special needs trust can be created as soon as it becomes apparent that the intended beneficiary will rely on government benefits to meet their basic needs for the majority of his or her life.
Even babies can be the beneficiary of a special needs trust. It is actually a good idea to set up a trust for a baby if medical malpractice was a cause of his or her disability. If a lawsuit is filed, proceeds from it can then go straight into the trust.
Special needs trusts cannot be created for anyone over the age of 65.
It is impossible to predict the future. The law creating and governing special needs trusts recognizes this, and allows trusts to be dissolved if the person the trust was intended to benefit no longer needs it.
There are no downsides to creating a special needs trust. If your loved one is a special person, consider creating a trust that will help enrich their life as soon as possible.