We are excited to share the information below on Special Needs Planning, which was written courtesy of our guest blogger Paul who is serving as a summer law clerk at our office.

What is a Special Needs Trust?

My older brother is autistic and will be dependent upon my parents for the remainder of their lives. He lacks the mental capacity to responsibly manage his own finances, and I have been concerned about what will happen to my brother once my parents are no longer with us and able to care for him. Thankfully, I have found peace in learning about a powerful estate planning tool known as a Special Needs Trust (SNT). Also referred to as Supplemental Needs Trusts, SNTs are created just like regular trusts by securing assets within the SNT for the beneficiary. When creating a special needs trust, you will also choose someone to serve as trustee. With the direction of the trustor (the person who created the trust) and their trusted discretion, this person will distribute the assets and could also help the beneficiary manage their inheritance by determining how, when and on what to spend their money. SNTs are made specifically for the benefit of disabled or mentally ill beneficiaries. The trust is created with the beneficiary’s specific needs, lifestyle, and future in mind.

Why Have a Special Needs Trust?

SNTs are valuable tools in protecting assets from being irresponsibly spent, but can also help protect the beneficiary’s ability to receive benefits such as Social Security Insurance and Medicaid. Owning property, such as a home, car, or other personal items, does not affect eligibility for SSI or Medicaid. However, other assets, such as the amount of cash in a bank account, will disqualify someone from maintaining eligibility to receive public benefits.

One of the most common ways to avoid the loss of benefits, or the irresponsible management of finances, is to create a special needs trust. Instead of leaving property directly to the beneficiary, the assets are left to the trust. A trustee will be in complete control over the trust and will be responsible for spending money for the beneficiary’s benefit. Because the property is left to the trust, and the beneficiary does not have control over the assets, the property will not count against the beneficiary’s eligibility status for public benefits.

The trustee does have broad discretion in administering the assets on behalf of the beneficiary. Common uses for funds in a supplemental needs trust are: personal care, vacations, home improvements, out-of-pocket medical and dental expenses, vehicles, and much more.

The Probate Pro is here to Help You!

SNTs are complicated areas of the law, and the guidance of an estate planning attorney is strongly recommended to properly plan and create a special needs trust. If you think a SNT is right for you and your loved one, or if you have more questions about the benefits of this estate planning tool, please contact us for a free consultation at 248.399.3300 or Info@TheProbatePro.com. We are here for you!