Establishing a special needs trust can be an invaluable part of the estate planning process. A special needs trust is a specific type of trust used to provide supplemental support to a person with disabilities without jeopardizing the individual’s continued receipt of government benefits. You may have a loved one with special needs who you wish to provide for so that they always have a certain standard of living. While government benefits can be of great help to meet basic needs, a special needs trust can allow a special needs individual to have supplemental needs met.
What is a Third Party Special Needs Trust?
A special needs trust is also commonly referred to as a supplemental needs trust as it is intended to provide care for a special needs individual above and beyond what government benefits may provide. In other words, the trust will provide supplemental funds to the special needs individual to cover things that government benefits do not. In fact, a special needs trust must only provide for those supplemental needs and not for the basic needs that are supposed to be covered by government benefits. If the special needs trust funds are used to provide for things that government benefits are supposed to cover, then it will jeopardize the special needs individuals continued receipt of those government benefits.
There are several different types of special needs trust and a third party special needs trust is one of them. With a third party special needs trust, the trust is funded with assets from an individual other than the one with special needs; in other words, a third party. Most commonly, the trust is funded by parents or another family member. The trustee of the trust is granted broad discretion on how distributions from the fund to the special needs individual are made. It is a great responsibility as no proceeds from the trust may be used for ordinary care when the special needs individual is receiving government benefits that should cover ordinary care.
The role of the trustee with regards to administering a third party special needs trust is very important. Improper management and disbursement of trust assets can put government benefits in jeopardy. Carefully choose a trustee who will take on this great responsibility with great care. It would also be a good idea to select someone who is familiar with the unique needs of the special needs individual. The trustee should also be familiar with government benefit programs for disabled individuals and the particular eligibility requirements for these programs.
Helping You to Always Protect the Best Interests of Your Loved Ones.
When you develop a comprehensive estate plan that takes into account the unique needs of you and your family, you are protecting the future for your loved ones. A special needs trust is one of those invaluable legal tools that can bring a great deal of peace of mind to you and your family. At M&A Law Firm, we are always here to look out for the best interests of you and your loved ones by developing an estate plan that meets your unique needs. Contact M&A Law Firm, P.C. today. We proudly serve Cook County and Schaumburg, Illinois.
