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Special Needs Planning

If you have a child or another loved one with special needs, you want to ensure that his or her financial needs are taken care of in the future. Setting up a trust is one of the most effective ways to protect your loved one financially and ensure that he or she maintains eligibility for government programs.

An inheritance or sum of money given directly to a person with special needs may make him or her ineligible to receive public health benefits. A properly drafted special needs trust or supplemental needs trust ensures that your disabled loved one receives the assets in the trust without being disqualified from public benefit programs.

A special needs trust can be funded by the disabled person’s assets (known as a first-party Special Needs Trust) or with assets from a third party such as a parent (known as a third-party Special Needs Trust). A first-party Special Needs Trust is usually created when a disabled person inherits directly from an heir or receives compensation from a lawsuit.  The downside of this type trust is that any money left over when the disable person passes will have to the State to reimburse Medicaid first.  If there is any money left then it can be distributed.   The advantage of a third-party Special Needs Trust is that Medicaid does not have to be reimbursed.  Therefore, if you have a disabled loved one you wish to leave assets to, it is vitally important that you employ a Special Needs Trust.

The assets in the trust can be used for items or services that are not covered through government assistance, including vacations, educational programs, personal care items and medical treatments or therapies not covered by a government program. The funds in the trust will be distributed to the beneficiary by a trustee at his or her discretion. This ensures that they are used correctly and do not affect your loved one’s eligibility for public benefits programs.

Contact us today so we can help with your Special Needs Planning.  

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