SPECIAL NEEDS PLANNING
WHAT IS SPECIAL NEEDS PLANNING?
Special Needs Estate Planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs require careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children – both now and in the future.
Special Needs Trusts are a crucial component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Many families struggle with the best way to provide for a child or other loved one who, due to a physical or mental challenge, and may never be in a position to effectively manage an inheritance. In addition, without proper planning, they may not qualify for certain supplemental government benefits, or become much more difficult to obtain.
TYPES OF SPECIAL NEEDS TRUSTS:
There are two types of Special Needs Trusts:
Third-Party Special Needs Trust: Created using the assets of the family members as part of an estate plan; distributed by a Will or Living Trust.
Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.