If you have a loved one who is receiving government benefits or might receive those benefits when you pass, a special needs trust is a necessity to ensure that your loved one doesn’t become ineligible to receive those benefits. In addition to the protection of government benefits, there are two big advantages of a special needs trust.
One, you can designate those persons who will manage the funds for the benefit of your loved one. You can choose the persons who will be responsible for spending your loved one’s funds and making sure that he or she is taken care of financially.
Secondly, government benefits only provide the minimum for your loved ones. With a special needs trust, you can provide all those things for your loved ones that they want and desire without worrying about them losing their eligibility for government benefits.
How does a special needs trust work?
You can create and fund a special needs trust during your lifetime or it can be created upon your death with property that is part of your estate. You designated the persons who will be in charge of the trust property and the person who will succeed the initial trustees if they can’t serve. The trust will contain specific language to ensure that the funds are only used to supplement the benefits the beneficiary is already receiving from the government. If you are creating a special needs trust for a surviving spouse, the rules are different as this special form of trust must be included in the decedent’s will.