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3 important facts about special needs trusts

| Jan 21, 2021 | Trusts |

If you’re putting together your estate plan and have a dependent who has special needs, it may be wise to consider how a special needs trust could help. This kind of trust is created for another person’s benefit without negatively affecting their governmental benefits.

For example, if you have a child who has autism, they may be on benefits through the government. If you leave them a home and a large life insurance policy, they may have too many assets to qualify for assistance any longer. They would potentially lose their benefits, and they’d have to spend down what you left for them before being able to receive benefits again in the future.

Using a special needs trust protects your beneficiary

A special needs trust protects your beneficiary by holding the assets you want to leave behind out of their name. A trustee will manage that property and make sure that it is spent in the way that you wanted. Generally, this trust goes on so long as it has funding or until a beneficiary’s death.

On top of this, placing assets into a trust means that the government will not consider those assets as part of your beneficiary’s income or personal assets. That way, they can continue to qualify for benefits while still having access to additional income and support that they may need in the future.

Consider a special needs trust if you have a dependent with a disability

There may be more options available to protect your loved one. Your attorney can talk to you more about a special needs trust and help you determine if it’s something that you should set up for your child or dependent.