What is a Special Needs Trust?
If you have a disabled child or another loved one who is disabled, part of your estate planning process should be thinking about establishing a special needs trust (also known more simply as an SNT). While there are many different types of trusts that can be created in Connecticut and can provide benefits to the trustor (i.e., the person who creates the trust) as well as the beneficiary (i.e., the person or persons who will receive assets from the trust), a special needs trust is a little bit different. This particular type of trust is designed to allow a person to provide financial resources to a disabled person in a manner that allows the disabled person to remain eligible for government benefits. Our Canton special needs trust lawyers can tell you more.
Special Needs Trusts Are One Specific Type of Trust
To be clear, a special needs trust is a type of trust, which means there will be a trustor and a beneficiary, as well as a trustee who maintains the assets in the trust, but it is a very specific or specialized type of trust.
Purpose of a Special Needs Trust
Unlike other types of trusts where most parties can be named as beneficiaries, a special needs trust is specifically designed to benefit a disabled person who receives government disability benefits without affecting eligibility for those disability benefits.
To be clear, many disabled people in Connecticut rely on Supplemental Security Income (SSI), administered by the Social Security Administration (SSA), as well as Medicaid, for financial resources and health care. Yet to be eligible for these benefit programs, a person must have limited assets and resources. Accordingly, if a disabled person who relies on these programs for benefits and care receives an inheritance, they might have too many assets to remain eligible for SSI or Medicaid. This is where a SNT becomes extremely important.
A SNT holds assets for a disabled person, and allows that disabled person to have access to assets in the SNT, while remaining or becoming eligible for SSI and Medicaid.
Creating a Special Needs Trust
There are two kinds of special needs trusts in Connecticut, and the type that you create will depend on the specific circumstances. Many special needs trusts are third-party trusts, which means the trustor has a disabled relative or loved one and wants to provide them money or an inheritance without impacting SSI or Medicaid eligibility. At the same time, there are situations where adults become disabled and do not want to have to spend down assets in order to be eligible for certain benefits. In these types of cases, the disabled adult may be able to create a self-settled special needs trust that they fund with their own assets.
Contact a Canton, Connecticut Special Needs Trust Lawyer
Special needs trusts are often critical for a disabled adult child or other disabled loved one to be able to have the level of care they need while remaining eligible for important disability benefits. If you have questions about planning for a special needs trust, or if you are ready to create a special needs trust, you should get in touch with an experienced Connecticut special needs trust lawyer at the Law Office of Brian S. Karpe today. We can discuss the different types of special needs trusts with you that are available in Connecticut and can help you to get started on establishing one or both of them for a disabled person.
Source:
law.cornell.edu/wex/special_needs_trust
