What is a Special Needs Trust?
By Elder Law Answers
Multiracial family with special needs child sitting outdoors together on summer day. Child is sitting in wheelchair.
Americans are living longer than they did in years past, including those with disabilities. Planning by parents can make all the difference in the life of a child with a disability, as well as that of his or her siblings who may be left with the responsibility for caretaking, on top of their own careers and caring for their own families.
Special needs trusts (also known as “supplemental needs trusts”) are an important component of planning for a disabled child, even though the child may be an adult by the time the trust is created or funded. These trusts allow a beneficiary with a disability to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose her eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining her eligibility for public benefits.
There are three main types of special needs trusts: the first-party trust, the third-party trust, and the pooled trust. All three name the person with special needs as the beneficiary, but they differ in several significant ways, and each type of trust can be useful in its own way.
If you would like to contact an attorney you can reach us at (256) 886-2372 we would love to assist you in any of these matters.
This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.