A special needs trust can be a great way to provide for a loved one after you have passed away. There are some important benefits to setting this up instead of just leaving someone a bit of money in their bank account, but there are also many rules to be aware of. For example, this trust cannot be a revocable one. This means that you can’t change its rules once you establish it. A Washtenaw County trusts attorney can tell you more about this kind of arrangement and why you still might want to make one a part of your estate plan.
Why Form a Special Needs Trust?
As its name suggests, when you form a special needs trust the assets can be used to care for a loved one with special needs. Even if the beneficiary can work and pay for some of their own expenses, your assets can be used to help them live a fuller life. If they ever want to travel, invest in a hobby, or do anything else to enrich their lives, your money can allow that. And because of how this arrangement works, your beneficiary will not be seen as “rich” or “wealthy” in the eyes of the government, and that can be important.
Why Can’t This Trust Be Revocable?
An irrevocable trust cannot have its terms changed. A special needs trust is often set up this way so that no one can change the terms of the trust later and potentially take advantage of a beneficiary. Making this irrevocable also helps protects the assets inside from creditors or lawsuits.
Does a Special Needs Trust Interfere With Government Benefits?
So why should you set up this trust instead of just leaving some money for a loved one? When you leave your beneficiary money, that can actually be used against them if they rely on government benefits. They could end up having too many assets to qualify for programs like SSI, Medicaid, or housing assistance.
We don’t want that. When you set up a special needs trust, the assets are not treated as if they belong to your beneficiary. As a result, they can qualify for benefits and use money from the trust for other things.
Should I Hire a Lawyer?
We do recommend talking to a lawyer if you plan to set up this kind of trust. An attorney from our firm can help you with the paperwork, and we can help you figure out if it’s the right kind of arrangement for you and your family.
Schedule Your Consultation Today
If you are ready to make an estate plan of your own, contact Collis, Griffor & Hendra. We can schedule a consultation and take a closer look at your financial situation and your family’s needs. Then we can help you make a plan that protects your assets and provides for your loved ones.
