Special Needs Planning

Special Needs Planning can be a very important part of your estate plan when you have disabled loved ones whom you wish to benefit from your estate. The disability could be physical or mental, and includes addiction and poor spending habits.

What is a Special Needs Trust?

A special needs trust, sometimes also referred to as a supplemental needs trust (SNT), is a specific trust established for the care and benefit of an individual, often someone who would struggle to care for themselves without a parent, guardian, or other caregiver present. This kind of trust may be used to funds for a loved ones continued care and quality of life.

If your loved one is or, you believe may, receive state or federal benefits, an SNT can be designed to supplement those benefits. You can enhance their quality of life with the money you leave to them in trust.

Who Could Need a Special Needs Trust?

The most common use of a special needs trust is by a parent, guardian, or caregiver on behalf of a special needs child or other family member. However, a special needs trust isn't limited to children or younger family members. A trust could be established for an elderly parent, an extended family member, or other such individual who could need someone else to manage their funds for them.

Are There Reasons to Not Use a Special Needs Trust?

Typically a special needs trust is meant to improve the quality of life of the beneficiary and cover items termed "luxuries," such as tuition, travel, activities, and more. It is not meant to pay for daily expenses or living expenses such as rent or mortgage, healthcare, or meals. If distributions are distributed directly to the beneficiary or used to pay for these kinds of items, the funds could then count as income for the beneficiary, which could disqualify them from state and federal programs.

October is Special Needs Planning Month, so mark your calendars every October as a reminder to review and update any plans. A great resource to check out is the Special Needs Alliance, an organization with a great deal of information and resources to learn more about special needs planning overall. https://www.specialneedsalliance.org/the-voice/your-special-needs-trust-explained-2/