You may understand well enough that your loved one with special needs may require special aid throughout their lifetime. So, you must have the same mentality when working on your estate plan. Arguably the most important and effective estate planning tool you must establish is a special needs trust. Follow along to find out the advantages of different special needs trusts and how a proficient New York City trusts attorney at Zimmet Law Group, P.C. can help determine the one best suited for you and your loved one.
What are the important elements a special needs trust must address?
At the forefront, a special needs trust is intended to give your loved one supplemental financial aid without jeopardizing their eligibility for certain need-based government benefits programs (i.e., Medicaid and Supplemental Security Income). This is because these government programs typically enforce resource caps. Therefore, this trust’s funds may cover your loved one’s other basic needs and expenses not necessarily covered by these government programs. Without further ado, other important elements a special needs trust must address are as follows:
- This trust type must provide for your loved one’s current and future personal, medical, and financial needs.
- This trust type must protect your loved one’s assets from creditors or predators attempting to take advantage of their vulnerability.
- This trust type must appoint a trustworthy individual (i.e., a trustee) to manage your loved one’s personal, medical, and financial affairs fairly and appropriately.
What are the advantages of different special needs trusts?
Once you establish your goals for your special needs trust, you must determine which will allow you to achieve them best. The two most popular types are the first-party and third-party special needs trusts. For one, first-party special needs trusts must be funded by the beneficiary’s own assets before they reach the age of 65. Secondly, third-party trusts must be funded by your assets or anyone else’s besides the beneficiary’s. The key advantages for both read as follows:
- Advantages of first-party special needs trusts:
- It may allow your beneficiary to remain eligible for need-based government benefits programs.
- It may allow your beneficiaries to set aside settlements, inheritances, and gifts to cover future expenses.
- It may let funds be readily available to cover expenses connected to your beneficiary’s health and well-being.
- Advantages of third-party special needs trusts:
- It may allow your beneficiary to remain eligible for need-based government benefits programs.
- Ir may not come with a payback provision to reimburse Medicaid for the benefits provided to your beneficiary during their lifetime.
- It may allow you, as the grantor, to confirm you have provided your beneficiary with enough financial aid to achieve long-term stability.
- It may be made revocable so that you, as the grantor, may modify its terms and conditions at any point during your lifetime.
In conclusion, you should not second-guess your decision to retain the services of a talented New York City estate planning attorney. This is because we can guarantee someone at Zimmet Law Group, P.C. can guide you through every step.
