A special needs trust is a legal document that allows individuals with disabilities to receive financial assistance in the course of their lifetime. It’s set up by a family member or friend, and it can help in covering the costs of medical care, housing, education and other similar needs. If you’ve been considering setting up a special needs trust for your loved one, there are some things that you need to keep in mind.
The individual can continue to receive government benefits without any interruption
Usually, when an individual with disabilities receives an inheritance or a financial gift, they become ineligible for certain government benefits, like Medicaid and Supplemental Security Income (SSI). However, if the money goes into a special needs trust, the beneficiary can still receive these benefits because the assets in the trust are not considered to be owned by the beneficiary.
You can choose how the money in the trust will be used
When you set up a special needs trust, you can specify how you want the money to get spent. For example, you can stipulate that it can only be used for certain expenses, like medical bills or education costs. This way, you can make sure that the money is properly used.
You can choose who will manage the trust
When you set up a special needs trust, you can specify who you want to manage the trust. This can be a family member, friend or financial institution. The trustee will be responsible for making sure that the money in the trust is used in accordance with your wishes.
Choosing to set up a special needs trust is a big decision. However, you’ll need to educate yourself as much as possible before making a final decision to avoid any stressful surprises later. For instance, make sure you understand how to get started, what the benefits are, and what to do if something changes down the road.