Reasons to Consider Establishing a Special Needs Trust
Special Needs Trusts (SNT) can be of great use for parents of children with special needs. Here are a few of the biggest reasons why you should consider including one in your estate plan if you have a child with special needs.
- Protect your child’s government benefits: Proper estate planning can help you preserve your child’s government benefits that might be in jeopardy if they were to suddenly inherit a large amount of money or assets. Supplemental Security Income has limits on income and assets, so using a SNT can help you get around those limits.
- Allow other contributors: By establishing a SNT, you can allow other people to contribute gifts to the trust as well, and in sizeable amounts before a gift or generation-skipping tax would apply.
- Direct the use of the assets: With a SNT, asset distribution is controlled with trust documents and must also follow IRS and SSA guidelines. You will be able to take more control over how those assets will be used, which is especially important when planning the future of children with special needs.
- Get the most out of an injury settlement: If you have a child who wins a personal injury settlement, you can have the payout from the settlement directed to a SNT. This means your child will still qualify for government benefits, and they can use those funds instead for nonessential expenses and enjoy greater financial security.
- Fund the trust in multiple ways: You can choose from a variety of methods to fund a SNT: cash, securities, life insurance policies and a variety of other resources. You might even be able to transfer from IRA assets into a SNT.
Interested in learning more about how to implement a special needs trust as part of your estate plan? Contact an experienced Tampa, FL estate planning lawyer at BaumannKangas Estate Law.