Raising children with special needs can be challenging, and one of the ways you may find yourself challenged is by caring for them after your death. One way to ease your anxieties is to create a special needs trust. This trust will act as a savings account for your child that gives you a place to store funds for their future when you cannot care for them. Special needs trusts help families navigate the rules and restrictions that come with special needs benefits and care and can be highly beneficial. Before creating a trust with The Millman Law Group, make sure you consider the following five factors.
What Goes Into a Special Needs Trust?
You can essentially keep savings in this trust. You can add any money you wish to leave to your child after your death. The crucial benefit of these trusts is that they protect your child’s inheritance from disqualifying them from SSI or Medicaid eligibility.
Appointing a Trustee
As with any trust, you will need to appoint a trustee to take care of the assets after you pass away. You can select a trusted family member or friend.
Special needs trusts are beneficial because they allow you to essentially make your child a beneficiary of your estate. This workaround is necessary because if your child’s assets are worth more than $2,000, they may get disqualified for essential federal benefits.
Consider a First-Party Trust
There are two types of special needs trusts, one of which is “first-party.” In this trust, the primary funding source is the beneficiary’s assets. If your child receives a large chunk of money, they will likely lose their benefits. However, if their money is kept in a trust, it will not be considered an asset or income. This means it will not interfere with your child’s federal benefits.
Parents, guardians, and courts can create a first-party stand-alone trust. An attorney must draft the trust, and the court must approve it. After that, the trustee manages the trust.
Consider a Third-Party Trust
The other primary type of special needs trust is a “third-party.” Anyone, apart from your child, can create a third-party trust for them. The trust will be in the name of the third party who owns the funds. Creditors cannot touch this trust, and friends and family members can freely contribute.
Estate Planning Made Easy With Millman Law Group
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.