SPECIAL NEEDS TRUST

One of the biggest problems that concerns those with Special Needs, and the families of those with special needs, is how to take care of that person after the caretaker dies. Most of us know that leaving money to someone who is receiving government assistance is a recipe for disaster. The inheritance can cause the person receiving the assistance to loose their assistance. It can even cause them to loose their healthcare benefits, which for some is a critical need. The unfortunate answer most come up with is to disinherit the person with special needs. I have even seen many trusts that do exactly that. They disinherit the person who needs the estate proceeds the most.

Some families are even under the mistaken impression that the person with special needs will be adequately provided for with government benefits. Ask anyone who is trying to survive on what the government is providing if they feel they are adequately provided for. Many of them find themselves living in substandard housing or having to hire a care giver at such a low wage that they end up with someone who steals from them or takes advantage of them in different ways. Again simply disinheriting the Special Needs family member, or leaving their share to a relative so that person can take care of them, is not the only, nor the best solution.

There is an alternative. It is called a special needs trust. A special needs trust holds the money for the person with special needs. It allows a trustee (not the person with special needs) to provide to the person with special needs, those items and services that will not interfere with the receipt of government benefits. For example, the purchase of a van equipped with a wheel chair lift. Generally, the ownership of such a vehicle is allowed and will not cause the cessation or decrease in receipt of benefits.

Many practitioners draft special needs trust as part of a revocable living trust. While that method is OK, it is not the most effective way to do things. It is best to draft a special needs trust that is independent of all other trusts. The benefit to doing this, is that it enables multiple parties to leave bequeaths to the special needs trust.

It is also very import that any special needs trust be accompanied by a letter of instruction for the trustee. The letter should contain background information about the person with special needs. Your Attorney should be able to provide you with an outline to follow. This letter should be placed with the trust so that the Trustee can use it to help him or her make good choices for the beneficiary with special needs.

The Trustee of a special needs trust has an awesome responsibility. It is important to choose that person wisely. They have to be able to determine appropriate gifts that will not trigger the loss of benefits. Again the Attorney who drafts the Special Needs Trust should provide you with a second letter of instruction for the Trustee of this trust.

In general a stand alone Special Needs Trust is a good way to take care of your special needs child or dependent family member when you are gone. For more information contact us for a free consultation.

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