The Benefits of a Special Needs Trust

The Benefits of a Special Needs Trust

A special needs trust is a crucial estate planning tool for persons whose beneficiaries (minor or adult) have special needs. Here are a few of the biggest benefits of implementing this tool in your estate plan.

  • Preserve government benefits: By using a special needs trust, you can provide for your beneficiary without risking their government benefits. Programs like SSI and Medicaid have income and asset limits, so if you were to leave money or assets to your beneficiary outright, it could result in them no longer qualifying for those programs. With a special needs trust, you can assign a trustee to manage the distribution of those assets to avoid such issues.

  • Others can contribute: Other people, such as grandparents or family friends, can contribute to your special needs trust as well, which will also help avoid direct bequests that could jeopardize your beneficiary’s benefits.

  • Control asset usage: With a special needs trust, the trust documents will govern the distribution of those assets, giving you greater control of how they can be used.

  • Collect legal settlements: If your beneficiary wins any kind of legal settlement, such as a personal injury claim, you may be able to have the money paid out into the special needs trust. This allows your child to still quality for benefits while having that settlement money add to their financial security.

  • Useful in divorce: If your beneficiary who receives government benefits goes through a divorce, a special needs trust could be created as part of the divorce decree, allowing alimony and lump sum payments from the child’s ex to be paid into the trust instead of directly to them. This will preserve their benefits, and could also be beneficial for the ex, as the preservation of those benefits could lessen the amount of money they need to pay.

For more information about special needs trusts and their benefits, contact an experienced Florida estate planning attorney at BaumannKangas Estate Law.