What is a Special Needs Trust?
- September 1, 2017
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If you are the parent of a special needs child, you are no stranger to being an advocate — more likely a warrior —- for your child. In a previous blog post we write about issues to keep in mind when creating an estate plan for your child to be sure that he/she never missed out on benefits. You can see it HERE.
This post is to familiarize you with special needs trusts. These trusts are as special as the individuals they are created for because it is done in such a way that a he or she does not lose any rights to government benefits or assistance while still receiving inheritance money. Anyone can establish a special needs trust, but there are two general categories of such trusts: self-settled and third-party trusts.
What is a Self-Settled Trust?
Thank u so sorry to hear that we A Self Settled trust is a trust that is usually established by either the individual or a conservator usually in response to a personal injury settlement or inheritance.
What is a Third-Party Trust?
Parents developing a trust for their special needs child, will be more familiar with this type of trust, which is established by one person for the benefit of another.
For the sake of the rest of this post, we will be referring to Third-Party Trusts and the few rules governing them, such as:
- The trust cannot provide food or shelter directly or indirectly.
- It cannot create any income or offer cash directly.
- It can provide some utilities, but not others.
- It can provide physical therapy and other medical treatments, companionship and even some clothing.
- It can provide education, entertainment and travel.
- It can provide furniture and certain furnishings.
Properly designed, a special needs trust can receive retirement funds or other assets without creating negative repercussions. Your goal is to help your child with special needs without compromising his or her benefits, so we always recommend you work with a professional estate planning attorney to be sure.