Who would benefit from a special needs trust in New York?
There are several individuals that may need the help of a special needs estate plan. This includes those who cannot live independently because they have certain conditions, such as autism or Down Syndrome. Others who may need this 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?
A loved one with a disability has three main types of trusts that can be chosen from. They include the following:
- Third-Party Special Needs Trusts: This trust can be created by another person for a beneficiary. It can be made during an individual’s lifetime or in the event of a death because they are typically funded by life insurance. Relatives such as grandparents, siblings, aunts, uncles, and friends can make gifts to this trust.
- Self-Funded Special Needs Trusts: This trust is self-funded with assets owned by the trust beneficiary. They are usually required when a disabled individual received a settlement from a personal injury action or inheritance from a loved one. This is also used for divorce alimony, property division, and child support payments for a child with a disability.
- Pooled Special Needs Trusts: This trust is also funded with assets owned by the trust beneficiary. They are established and managed by nonprofit organizations. The assets are pooled together for investment purposes. However, the nonprofit organization manages a sub-account for the beneficiary. An individual with disabilities can establish a pooled trust sub-account on their own, which is why this is a common choice for beneficiaries who have no living relatives or guardians.
Does a loved one with special needs lose government benefits if included in a will?
Frequently, parents of children with special needs disinherit their special needs child out of concern of him or her losing out on government benefits. Luckily, there is a way for your child to both inherit your assets and keep his or her government benefits. An experienced estate planning attorney can help you establish these trusts, which is a great way to ensure your loved one is always taken care of.
Government benefits, including SSI or Medicaid, can assist your child with receiving medical and dental care, transportation services, education, and other necessary assistance. It is essential that your child does not lose these resources. Retain the services of a dedicated and trained attorney who understands the value and sensitivity of these conditions.
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