When people are discussing estate planning, they tend to automatically think about a will. While this is undoubtedly a key document, there are others that can be essential to serve one’s goals. Depending on the circumstances, a trust might be a necessity.
One type of trust that should be understood is a special needs trust. This will be useful for those who have a loved one who is getting payments from the government through a government program. It is important to know the details of a special needs trust and what the law says about it.
Important points about a special needs trust
People who have special needs are categorized as a protected person, meaning they are aged, blind, disabled, developmentally disabled, are under 18, or are over 18 as a full-time student and have serious disabilities. These individuals could benefit from a special needs trust. This trust will protect the person’s government benefits. If, for example, they are receiving Medicaid or Supplemental Security Income (SSI), they will not lose these benefits based on being the beneficiary of a special needs trust.
A person under 65 who the Social Security Administration (SSA) has found disabled can have assets in the special needs trust and the Medicaid eligibility will be maintained. This is because the beneficiary is not the owner of the assets in the special needs trust. There are key facts that should be known regarding the special needs trust and maintaining eligibility for various programs.
The funds can only be used by the beneficiary. The trust itself can only have assets of the individual and they must be placed in the trust before that person turns 65. It is an irrevocable trust and if the beneficiary dies, New Jersey Medicaid will be reimbursed for the benefits that the person received during their life. The special needs trust can be established by parents, grandparents or a legal guardian.
People considering the care of loved ones should understand special needs trusts
Estate planning can meet a person’s specific needs and a special needs trust is a primary example of that. A conventional will or trust will not provide the necessary care for loved ones while allowing that person to maintain their eligibility for benefits. The special needs trust can do that.