The beauty of trusts is that you can tailor them to suit your needs. For example, if you have a loved one with special needs, you can provide for them without affecting their eligibility for government programs.
You can do this using a special needs trust that ensures your loved one’s financial interests are protected in the long term.
How does a special needs trust work?
Like all other trusts, a special needs trust involves three parties.
- The person creating the trust
- The beneficiary
- The trustee who manages the trust.
Once you set up the trust, the next step is funding it or placing assets and properties in it. Afterward, the trustee is legally obligated to act under the trust terms and manage its assets in the beneficiaries’ best interests.
A special needs trust works by meeting some expenses not covered by social support programs. As long as proceeds from the trust go towards medical, transportation costs or other permitted expenses, the beneficiary can still qualify for and receive support from the government through programs like Medicaid.
Getting everything right
In a special needs trust, the devil is in the details. When setting up the trust, it is crucial to ensure that everything is done in accordance with the law. Even the slightest mistakes could void the trust and expose your loved one financially.
Remember, a special needs trust is irrevocable. Amending its terms after it has been established is not easy, which is why you need to get everything right. If you are thinking of securing your loved one’s future with a special needs trust, it may be advisable to learn more about how everything works and whether the trust will help you achieve your end objectives.