How Supplemental Needs Trusts Can Help Families Plan for the Future
Author : Mark Glendon | Published On : 13 Oct 2021
A supplemental needs trust is set up for disabled people who can either be a kid, an adolescent or an adult at the time one is set up. One reason you need to plan for your disabled child is that you may become incapacitated in some way. Another reason is that you may need to provide updates to reflect your current wishes. Siblings may need to step in to provide care for your child. You also want to be sure that your disabled child can live a quality life. There are many other reasons you will want to establish a supplemental needs trust, and there are some basics you should know.
The Purpose of a Supplemental Needs Trust
Supplemental needs trusts are created to provide the beneficiary with luxuries and comforts not regularly provided for through public benefits. A supplemental needs trust goes beyond basic necessities. It might cover funding for counseling, medical attention, education or recreation.
You Need to Set Up a Supplemental Needs Trust in a Specific Way
Because a disabled person may receive Supplemental Security Income (SSI) or Medicaid, it’s important to set up a supplemental needs trust in a way that the person can receive extra without compromising their receival or eligibility of public benefits. It’s important that you seek supplemental needs trust advice to ensure you do this correctly. Visit this website if you need third party trust or supplemental needs trust advice.
Three Types of Trusts
There are three types of trusts: a pooled trust, a first-party trust, and a third-party trust. The way you fund these are different. For example, you can use life insurance to fund a special needs trust. However, you should generally avoid retirement funds and IRAs if possible. These may negatively impact the public benefits your special needs child receives.
Get Help for Setting Up or Updating Your Supplemental Needs Trust
The information covered above is the tip of the iceberg. You need to consider other ways the trust may be funded, your child’s capabilities, how to reduce taxes and many other matters that are important. Contact the Burner Law Group, PC to get supplemental needs trust advice.
Mark writes often about estate planning. His articles may include topics like real estate closing attorney and business succession laws to help the people in needs. You can find his thoughts at estate planning solutions blog.