Understanding How Special Needs Trusts Work

Planning for the financial future of a loved one with special needs requires careful consideration and specialized tools. One such tool is a special needs trust.

How It Works:

• Purpose: A special needs trust holds and manages assets for the benefit of a person with a disability without jeopardizing their eligibility for government assistance programs like Medicaid and Supplemental Security Income (SSI).

• Trustee: The trust is managed by a trustee, typically a family member, friend, or professional trustee, who makes distributions on behalf of the beneficiary according to the trust's terms.

• Supplemental Support: Funds from the trust can be used to cover expenses not covered by public benefits.

• Types: Special needs trusts can be either third-party trusts, funded with assets belonging to someone other than the beneficiary, or first-party trusts, funded with the beneficiary's assets, often through an inheritance or personal injury settlement.

• Legal Requirements: Special needs trusts must comply with federal and state laws governing trusts and public benefits programs to ensure they achieve their intended purpose.

By understanding how special needs trusts function, individuals and families can better prepare for the long-term financial well-being of their loved ones with disabilities.

We specialize in educating and helping you protect what you have for the people you love the most. Contact us to learn more about how we can help.