Special Beneficiaries And Special Needs Trusts
Every person has an ‘estate’. You don’t have to own a mansion or have millions of dollars to have an estate. An estate, in legal terms, includes everything you own such as a house, car, bank accounts, retirement funds, life insurances, furniture, jewelry, antiques, trusts, annuities, business interest, cash and any other asset.
Most people are rather surprised at just how much they do own and their worth. Estate planning isn’t just for elderly or retired persons. No matter your age, it’s always a good idea to meet with an experienced wills, trusts and estate planning attorney to make sure your assets are protected and ensure, if something should happen to you, that your wishes are known as to who your beneficiaries are and what they will inherit.
There are over numerous types of Trusts. Our experienced wills, trusts and estate planning attorneys can set up a Trust to protect assets and ensure you have a plan for special needs beneficiaries. Special needs beneficiaries can encompass more than a disabled loved one.
If you do have a loved one living with a disability, a Special Needs Trust can be established specifically for that beneficiary. There are essentially two types of these Special Needs Trusts: Third Party and Self-settled.
A Trust can be set up allowing the disabled beneficiary to continue qualifying for certain government programs such as Supplemental Security Income, Medicaid, vocational rehabilitation and subsidized housing. This Trust is designed to set aside the inheritance to be used for supplemental needs such as education and certain other luxuries that can enhance a person’s quality of life. When funds are safely in the Special Needs Trust and administered by a Trustee, these funds are no longer considered an available resource. If the beneficiary receives an entire inheritance at one time or without the specific verbiage, that beneficiary may lose all the government benefits.
If you have a child under the age of 18, a Trust is an ideal way to help your child not to squander the entire inheritance. If your child is the beneficiary in a Trust, the court requires a guardian be appointed to handle the children’s inheritance upon your death until the child turns 18 years of age. Most 18-year olds are not that responsible, especially when receiving a large inheritance all at once. Most will probably spend the inheritance in a short time. A Trust can help prevent the misuse of the inheritance by having specific dates and portions of money the child will receive. For instance, a portion given at the age of 25, again at 30 years old and so on, or have the inheritance handled by a reliable guardian who can release funds for education or when needed.
Another ‘special needs’ beneficiary may be one who has serious credit issues or is incapable of handling money. If the beneficiary receives a lump sum or the entire inheritance, you can bet creditors and collection agencies will attach those funds immediately. If the inheritance is in a Trust, you can appoint a Trustee to hold those funds in the Trust until there are no creditor issues. The Trustee can also hold onto the funds until the beneficiary can show he/she is capable of handling the inheritance.
For more information about setting up a trust or beneficiary, call our attorneys at 303-618-2122 to schedule your consult.
Should you set up a special needs trust for your child or loved one?
The wills & trusts attorneys at Gantenbein Law Firm can answer your questions and make sure you have the best trust or beneficiary plan for your family.
Call 303-618-2122 to schedule your consultation.