Planning for a loved one with special needs is usually quite complicated. If you have a disabled child or family member, meeting his or her needs is a top priority. You provide physical and emotional support, arrange for care, and coordinate essential government benefits. The usual ways of providing benefit for your loved ones with special needs through gifting or inheritance can often times place in jeopardy any governmental assistance that may be available. A “special needs” or “supplemental needs” trust offers the peace of mind you want — and the effective financial solution you need.
A Special Trust for a Special Need.
The Trustee of a Special Needs Trust has Many Important Responsibilities
Choosing a Trustee
Appointing Garden State Trust Company as trustee offers several advantages.
• Knowledge of federal, state,
and local laws and
• Administering to special
• Professional investment
and asset management
• Seamless services
throughout the disabled
• File required accountings.
Many government benefit programs, both state and federal, are need based and are available only to those with very limited income and assets. If you transfer assets directly to your child, the money could end up going to pay for costly basic services that would otherwise be covered instead of providing the quality-of-life “extras” that you intended. Another downside to transferring assets outright is that your disabled child or relative may not have the skills to manage them.
A Special Solution
Although the situation is complicated, there is a solution: a well-constructed, carefully drafted special needs trust (SNT) allows you to leave assets to a loved one and preserve certain government benefits. Trust assets generally may be used to provide your disabled beneficiary with special or supplemental benefits, but not with certain other essentials, such as food, rent, medical care, or other basic benefits provided under a government program.
You appoint one or more trustees to manage the SNT assets for the benefit of your child or relative according to the instructions you provide. You can give the trustee valuable guidance and insight by also providing a letter of intent: a written, detailed description of your loved one’s daily life, likes and dislikes, health issues, and so on.
Many Special Advantages
A special needs trust may be established with a disabled beneficiary’s own assets (such as the proceeds from a lawsuit). Such trusts are called “self-settled” or “first-party” trusts. SNTs established by a third party are the most common type of SNT. They are created and funded with the assets of a person other than the disabled individual.
Since the disabled beneficiary does not have the legal authority to direct the trust assets, they typically are not counted as available resources for government benefits.
Special needs trusts are complex and should be drafted by a qualified attorney. To be effective, they must be carefully structured and administered. A special needs trust is an excellent solution when a disabled beneficiary is involved. The professionals at Garden State Trust Company have years of experience working with special needs trusts.
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