For Nevada residents, trusts can be a major part of their estate planning regime. One particular type of trust may be useful in situations where there is a child who has special needs.
A special needs trust exists to support a person who has certain health care or other types of needs. The assets, like with other types of trusts, are kept with a trustee. The beneficiary who has special needs does not have control over this money. The assets can be directed to pay for the beneficiary’s care, purchase a home or provide handicapped-accessible transportation.
This type of trust serves to avoid some problems that could crop up from the use of other estate planning methods. For instance, if the money is left to a third party in order to care for the special needs child, that third party could simply use the money for themselves and put the person with special needs in an assisted living facility. Also, if the person with special needs relies on government benefits for health care and income, the special needs trust shouldn’t affect this. This is due to the fact that the person does not control the money directly, and it would not be counted toward their income when determining eligibility for benefits.
The person setting up the special needs trust may benefit from a consultation with an estate planning attorney. The attorney may be able to help with crucial decisions, such as how much money to fund the trust with, who to choose as the trustee and in complying with the many regulations surrounding these trusts. The attorney may also be helpful in counseling and crafting a comprehensive estate plan that protects the family’s assets and minimizes the tax burden on the beneficiaries.
Source: CNBC, “Special needs trusts: Helping parents provide for kids’ futures“, Jennifer Woods, May 31, 2014