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Estate Planning for Special Needs Family Members | What to Know

It may come as a surprise, but direct distributions of funds from an estate plan can inadvertently disqualify a loved one from receiving government benefits. It is because of this that there are specific steps to take when it comes to caring for a special needs friend or family member. A special needs estate plan can provide your loved ones with more than just essentials. It can focus on unknown issues that may arise over time and ensure that your loved one will not be without “non-essentials” that are not covered by government-funded programs. This can include companionship, clothing, any necessary aid, dental care, the ability to see family, and more. Read on to learn more about special needs estate plans in New York. 

Who Needs a Special Needs Estate Plan?

Individuals who may need the assistance of a special needs estate plan are those who will never be able to live independently. This may include those with autism or Down Syndrome. Others who may need the plan can include individuals with a progressively debilitating disease, such as Parkinson’s, Alzheimer’s, or ALS. 

What are the Different Types of Special Needs Trusts Available?

In New York, there are three different types of trusts available for those with special needs. This includes:

  • First-party special needs trusts: These are only established by parents, grandparents, or legal guardians, and they are funded with the beneficiary’s funds. If the beneficiary is under 65, he or she will qualify for this irrevocable trust.
  • Third-party special needs trusts: These trusts are created for beneficiaries, and may either be created during a lifetime or upon death. Generally, these trusts are funded through life insurance, though family members, and even friends, can contribute gifts to these trusts.
  • Pooled special needs trusts: This is when a group of individuals pool their assets together into a larger investment fund. However, to qualify for a pooled special needs trusts, you must first establish a disability and the need for the trust in question to be developed through a nonprofit organization.

If you have any questions or concerns about creating a special needs estate plan, contact our experienced firm today. We are here to walk you through the process each step of the way.

Contact our Firm

The Lauterbach Law Firm is proud to serve clients throughout Rockland County who are faced with legal matters related to estate planning, real estate, foreclosure defense, landlord-tenant law, business law, and criminal defense. If you require the services of an experienced team of attorneys, contact The Lauterbach Law Firm today to schedule a consultation.

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