When you set up a special needs trust, you are providing a loved one with assets that they can use to make their lives fuller and more enjoyable. What you are not doing is setting up a trust that can be tweaked or have its terms changed whenever you want to. That’s because a special needs trust should not be a revocable trust, one where the creator stays in control and can change the rules when needed. A Rockland County estate planning attorney from our firm can tell you more about how this works and why this kind of trust needs to be set up in a certain way.
Why Can’t I Make a Special Needs Trust Revocable?
A revocable trust can have its rules changed at any time, but that may not be ideal for this particular kind of trust. You are setting this trust up to care for a loved one. You should not need to keep going back to it to change the rules.
What is an Advantage to Making This Trust Irrevocable Instead of Revocable?
When a special needs trust is irrevocable instead of revocable, the assets are better protected. No one can take advantage of your beneficiary and change the terms of the trust to benefit themselves. The assets in an irrevocable trust are also protected from other people who may try to come after your money, like creditors or plaintiffs in lawsuits.
The only issue is that you really cannot change the trust or its terms if the needs of your loved one change. This is a potentially important drawback to keep in mind, but overall we think that the irrevocable nature of this trust is more of an advantage than a disadvantage.
What Does a Special Needs Trust Do?
If you’re unsure of exactly how a special needs trust works, we would be glad to answer your questions. This type of trust allows you to pass on assets to a loved one, but the assets in this trust do not count as your beneficiary’s income.
This is important. Many people with special needs rely on benefits, like SSI or Medicaid. Having too much money can prevent them from claiming such benefits. A special needs trust allows you to leave something for your friend or relative without jeopardizing their access to benefits that they depend on.
Do I Need a Lawyer to Set One Up?
We do recommend having an estate planning lawyer set up a trust on your behalf. There is quite a bit of work involved and there are legal requirements that a special needs trust needs to meet. You don’t want to make any mistakes when setting up a trust because it can result in legal headaches later on.
Contact Our Law Firm Today
If you are thinking about your own estate plans and how you can care for your loved ones once you are gone, contact the Lauterbach Law Firm. We can tell you more about special needs trusts and other estate planning tools that might be a good fit for you and your assets.
