Special Needs Trust is a legacy planner designed to care for a person with a significant physical or mental disability that has been verified without ingesting additional Welfare Income and Medicaid benefits. However, while that can ensure that a disabled relative continues to receive quality care after his death, Amos Goodall, an elderly lawyer and member of the Special Needs Coalition, said in a 2013 article on Bankrate.com that “establishing a special need for trust is not a do-it-yourself project.” Professional guidance is essential.
How it works
According to Heath Burch of the Center for Special Needs Planning in Kansas City, Missouri, third-party trusts are the most common. With this type, you create a trust structure, fund it with a minimum amount now and then specify real estate assets, such as life insurance, your home, or cash inheritance, to fund the trust fund after your death. Others, such as grandparents, a family member, or friends, can also specify assets in their wills to move to the trust. Trustees can then use the funds to supplement the income from SSI and Medicaid benefits, and pay for things like personal caregivers, vacations, education, and recreation.
Choose a lawyer
Because even a false word can deny trust, it is important to work with lawyers in drafting the necessary legal documents. The National Alliance on Mental Illness recommends researching and interviewing some candidates to find the best lawyer out there. Consider whether the attorney has experience in special needs trusts, is up-to-date on any Social Security, Medicaid, and Department of Mental Health rules, and monitors any references he provides.
Name a Trustee
Exercise extreme caution in selecting trustees, as trustees have broad arbitrary powers and authority to manage trust funds and distribute their assets on behalf of beneficiaries and because effective management requires a lot of work. NAMI recommends naming a family member as the primary trustee and a professional trustee as a co-trustee. In this way, you have a person who can meet and pay attention to the needs of the beneficiary and a person who is proficient in the tasks of trust management and administration.
Estimate how much the beneficiary will claim, specify funding sources, and include them in your will. First, estimate how much money is needed to care for the beneficiary while you are still alive and then determine which remaining assets will be used to fund the trust. If you need help, MetLife’s Special Needs Planning Center has a free computer to estimate costs. According to Nolo.com, you can specify almost any type of property or property, including real estate, stocks, valuable collections, and jewelry. After funding the trust, draft a letter of intent and attach it to the trust fund. In it, specify how you want the money to be used and include notes about the interests and dislikes of beneficiaries.