Some people in Nevada might want to create a trust for a family member with special needs who gets government benefits. These trusts can be a way to continue helping a person who has special needs without jeopardizing that person’s access to those benefits.
In general, a trust is a document that is set up to protect assets. Normally, there are three people involved: the person who sets up the trust, the trustee and the beneficiary.
There are three kinds of special needs trusts. A person who gets Supplemental Security Income is not supposed to have more than $2,000 in assets. If the person has an inheritance, a settlement from a lawsuit, or other assets worth more than that, the person is permitted to place them in a first-party trust and continue to receive benefits. In another case, a person with special needs may have few assets, but loved ones may want to help. They can set up a third-party trust. Finally, there is a pooled trust. This is the kind of trust that is set up if there are multiple beneficiaries who have special needs. In some cases, people may place assets in a special needs trust if they are trying to reduce the value of their estate for tax purposes or to qualify for Medicaid.
There are a number of other different kinds of trusts that serve various functions as part of an estate plan. For example, trusts may protect assets from creditors. If one beneficiary is likely to be irresponsible with the funds in a trust, the trust could be set up to only allow distributions at the discretion of the trustee. The distributions could also be tied to specific events such as reaching a certain age, income level or educational achievement.