How to Set Up a Special Needs Trust

If you have a loved one with special needs, you know how important it is to make sure they are taken care of. One way to do this is by setting up a special needs trust.

In this article, we will discuss what a special needs trust is and how to set one up. We will also talk about the benefits of having a special needs trust in place.

What Is a Special Needs Trust?

A special needs trust is a trust set up for a person with disabilities. The money in the trust can be used to pay for things like education, housing, and medical expenses. This is important because it allows the person with disabilities to maintain their independence and quality of life, while protecting their assets.

What Are the Benefits of Having a Special Needs Trust?

There are many benefits of having a special needs trust. One benefit is that the beneficiary can still receive government assistance, including Medicaid and Supplemental Security Income (SSI). This is because the funds in this type of trust do not count as income or assets for purposes of determining eligibility for these programs. Another benefit is that the trust can help the beneficiary maintain their independence. This is because the funds can be used to pay for things like housing and transportation.

How Do I Set Up a Special Needs Trust?

There are two ways to set up a special needs trust: the first is through a will and the second is through an irrevocable trust.

The Will Method

If you want to set up a special needs trust through your will, you will need to create a new document called a "special needs trust." This document will specify how much money should go into the trust and what it can be used for. It also needs to include a provision that says the beneficiary cannot access these funds until they reach age 18 or another age if you so desire.

The Irrevocable Trust Method

If you want to set up a special needs trust through an irrevocable trust, you will need to create a new trust document. This document will state that the money in the trust is for the benefit of a person with disabilities. It will also list who the trustees are and how the money should be used.

Contact Us to Learn More About Special Needs Trusts

If you have any questions about special needs trusts, please contact our office. We are happy to help! Click here to Schedule a FREE Virtual Estate Planning Session.

Parenting Tip:

How to Start Saving for Your Kids’ Education. A good way to start saving for your kids’ education is by opening a 529 plan account. This type of savings account allows you to invest money in mutual funds or other investments, which can grow tax-free until withdrawal. You may also be able to take advantage of state tax deductions if your state offers them.