The purpose behind a special needs trust is to protect certain assets for loved ones who cannot take care of their financial situation by themselves. Although it can be complicated to establish, hiring an experienced lawyer is the best course of action. There are many situations and differing family dynamics where a special needs trust might be appropriate for a loved one, particularly a child with special needs. The ultimate outcome of a special needs trust is to support the quality of life of that person.
There are many public benefits that could help support someone with a disability and enhance their quality of life. However, these public benefits usually have income and asset limits. If someone owns more assets than allowed, then they will not be eligible for the benefits. For example, Supplemental Security Income (SSI) is available for people with special needs. Medicaid is available for someone with special needs in order to cover the costs of their health and medical expenses.
However, when applying for SSI and Medicaid, the Social Security Administration does not count assets contained in a special needs trust in a beneficiary’s name. Therefore, parents and family members can place money and assets in a trust for the benefit of their child without harming their chances of receiving SSI and Medicaid.
Protection of Assets
A special needs trust can also be established to ensure that the assets placed in the trust are protected. The trust documents can dictate how the assets are used. This makes sure that the beneficiary does not waste the assets. Also, there are legal protections for the beneficiary if the trustee violates the terms of the trust.
Another benefit of a special needs trust is that the trust can be funded with not just cash, but other assets. The trust can be funded by securities, other retirement accounts, life insurance policies, and other assets.
Shield Personal Injury Settlements
In some cases, beneficiaries receive large cash settlements of jury verdicts for personal injury cases or possibly other types of litigation. If a large amount of money is transferred to the beneficiary, they may lose their right to receive SSI or Medicaid and/or other governmental benefits.
However, if the lump sum money is placed in a special needs trust, the money will be protected without adversely affecting the person’s benefits. Further, these funds in the special needs trust can be used for many things that would enhance the quality of life of the beneficiary.
Delaware County Wills and Estates Lawyers at Eckell Sparks Establish Special Needs Trusts
Our Delaware County wills and estates lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. have been helping families and individuals establish special needs trust for decades. We are here to help you and answer all of your questions. Located in Media and West Chester, Pennsylvania, we serve clients throughout Delaware County, Chester County, and Montgomery County. Call us at 610-565-3701 or complete our online form for an initial consultation.