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Frequently, parents or guardians establish a special needs trust for a child with special needs or a child with disabilities. Perhaps you're more familiar with the phrase special needs trust fund. Here is where caregivers can deposit funds for their child with special needs. What distinguishes these trusts, however, is that the fund allows the child to continue to qualify for or access government benefits such as Medicaid. Special needs trust funds can be classified as either Revocable or Irrevocable Trust.
Once caretakers or parents set up a trust for their special needs child, ideally that child should be financially cared for until death. This gives both the parents and child peace of mind that the child won't be financially or physically neglected once the caretakers pass on. There are different kinds available:
A first-party is supported by the assets and funds of the disabled individual. This type of trust can be established by disabled individuals to safeguard their financial destinies; the funds can come from an accident settlement or an inheritance. The beneficiary must be under the age of 65, and the trust is frequently unalterable or irrevocable.
The money and assets of others, such as family members, donors, and acquaintances, are used to fund a third party. This type of trust restricts the beneficiary because he or she cannot make expenditure decisions. The trustee (the individual in command of the trust) determines the expenditures.
A pooled trust is funded by a non-profit organization, and a professional is appointed instead of a family member to serve as trustee.
When creating a trust for a special needs child or one with disabilities, you'll find that there are several benefits.
Healthcare and government benefits are indispensable for individuals with disabilities or special needs. When a trust is created for a child with special needs, the child's eligibility for government programs such as Supplemental Security Income (SSI) and Medicaid is not affected.
Because those with special needs are often unable to fully care for themselves, their quality of life can significantly dip if there is no longer a caretaker in their lives. A trust can ensure that the beneficiary has a caretaker for life. With a trustee, beneficiaries can have all their comfort needs met, such as groceries, gym memberships, and even subscriptions.
With the cost of living rising over the years, a trust may not necessarily have enough funds, especially as the beneficiary ages. There may also be emergencies that require a lot of money, such as a long hospital stay. In cases like this, the trust fund may take a huge hit. The advantage of having a trust set up is that family and friends can add to it and continue to build its assets.
You may want to contact special needs trust attorneys if you have real estate or other assets you'd like to safeguard in the trust. By keeping these kinds of valuables in the trust, you can ensure they are not mismanaged or even lost.
Those with special needs or disabilities may not be in a frame of mind to manage their own finances. However, with someone in charge of their affairs, beneficiaries can have peace of mind that they will receive life-long care.
Generally, a Special Needs Trust Fund is for individuals with disabilities or special needs who are unable to take care of themselves financially. Often such people will need a guardian for the rest of their lives. Clients must be recognized as disabled by the Social Security Administration in order to be eligible for a Special Needs Trust Fund. It is important to contact a special needs trust attorney to find out who is eligible, as this can vary from state to state.
Those with special needs or disabilities may have conditions such as:
Chronic mental illness
Paraplegia (physical paralysis)
Some individuals may be dependent on Medicaid or SSI throughout their lives as a result of a physical injury or a mental illness, such as schizophrenia. This condition may limit their ability to work. In cases like these, there is a financial cushion for the rest of their lives.
Some individuals - due to specific circumstances - end up financially dependent on their parents or caretakers. If the parents believe that this person will suffer significantly after their death, a trust can be set up. In specific cases like this, contact a special needs trust lawyer to determine if the individual is eligible.
If you are considering setting up a trust for your child with special needs, you should strongly consider contacting a special needs trust attorney. Trust attorneys with special needs can provide step-by-step guidance to ensure that a trust is legally established. Here are the steps needed to set up a trust fund for special needs.
Typically, a special needs trust attorney is involved in setting up the trust to make sure everything is done right. It can be created by parents, grandparents, family members or a legal guardian. It can also be created by a person with special requirements. At this stage, persons setting up a trust must complete a form for special needs trusts. It can be set up without an attorney, but if you want something custom, hiring attorneys with special needs is recommended.
The next step is to appoint a trustee. This person will be in charge of the trust and be responsible for allocating the money to the person with a disability (the beneficiary). It is important that trustees also name a "trustee's successor" in case they die or become incapacitated.
Once you have signed a special needs trust form, you can add money, real estate, jewelry, a will, or even a living trust. Once you have created a trust, anyone can add funds.
Once everything is set up, a trusted person or administrator is responsible for ensuring that all of the recipient's bills are paid. These bills include medical bills, travel expenses, therapy bills, education bills, and any other needs a person with a disability might need or even wish for. The administrator must also keep a record of all transactions and file tax returns. The administrator is also responsible for constantly updating the trust due to changing laws or circumstances.
Generally, a special needs trust fund remains active until the death of the beneficiary. However, in exceptional cases, it may be terminated in advance. An example is when a trust runs out of money.
In order to set up a Special Needs Trust with an attorney, call our main line at (800) 662-0882 and speak with a certified legal expert at Citadel Law Corporation today.
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