It may come as a surprise, but direct distributions of funds from an estate can inadvertently disqualify a person’s loved ones from government benefits. Unfortunately, creating a will or trust for your loved one can actually do more harm than good. Instead, it is important to take specific steps in order to ensure that your loved one is supported- This may involve creating a special needs trust. Read on to learn more about estate planning for a loved one with special needs.
Who Needs a Special Needs Estate Plan?
There are many different people who may need a special needs estate plan to assist them. They are mostly created for individuals who will never be able to live on their own as a result of certain conditions. This can include autism or Down Syndrome. Others who may need it can include individuals with progressively debilitating diseases, such as Parkinson’s, Alzheimer’s, or ALS.
What Types of Special Needs Trusts are Available in New York?
Every situation is different. As a result, there are different trusts available. In New York, you can create the following types of special needs trusts:
- Self-Funded Special Needs Trusts: This trust is self-funded with assets owned by the trust beneficiary. They are commonly required when a disabled individual received a settlement from a personal injury action or inheritance from a loved one. This is also used for divorce alimony, property division, and child support payments for a child with a disability.
- Third-Party Special Needs Trusts: This trust can be created by another person for a beneficiary. It can be made during an individual’s lifetime or in the event of a death, as they are generally funded by life insurance. Relatives such as grandparents, siblings, aunts, uncles, and friends can make gifts to this trust.
- Pooled Special Needs Trusts: This trust is also funded with assets owned by the trust beneficiary. They are established and managed by nonprofit organizations. The assets are pooled together for investment purposes. However, the nonprofit organization manages a sub-account for the beneficiary. An individual with disabilities can establish a pooled trust sub-account on their own, which is why this is a common choice for beneficiaries who have no living relatives or guardians.
If you have any questions or concerns about creating a special needs trust, contact our firm today.
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Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.
