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What Is Special Needs Planning?
Special needs planning provides for the transfer of your assets to your disabled beneficiaries upon your death without jeopardizing their eligibility for government aid.
Many people assume that they will just leave a disabled beneficiary an inheritance, or assume that they will be taken care of by other family members, but that’s problematic for many reasons. Your loved one may need to rely on government programs like Social Security and Medicaid if you are no longer around to provide for them, but these programs are needs-based. If you leave them an inheritance directly, they may have too much money in their name to qualify. The inheritance you had planned may need to go through probate court and be depleted by legal costs before they can receive it, anyway, and depending on your loved one’s disabilities, they may be too vulnerable to effectively manage the money you leave them.
Sadly, many cases have occurred where money left to a beneficiary with special needs is attacked by creditors or becomes the source of a family dispute. Simply leaving a will behind doesn’t guarantee your disabled loved one will receive the care they need. Special needs planning is the safest, most effective way to ensure a disabled loved one’s future financial security.
How Does Special Needs Planning Work?
Through special needs planning, you can designate a guardian and care providers, find housing, create special needs trusts and take other steps that don’t replace government aid programs, but that allow your loved one to enjoy additional comfort that may not covered by those programs (such as education, recreation, counseling, medical treatment, medical devices, and more).
Creating special needs trusts can be complicated, which is why it is best to work with a skilled Valrico special needs planning lawyer who will take the time to get to know you and your family. At Osenton Law, P.A., we care deeply about your loved one’s ability to thrive. We will listen to you, ask the right questions to get a better idea of your goals, answer any questions you may have, explain all of your legal options, and then draft the legal documents necessary to protect your beneficiary with special needs. We’ll educate you so you’ll understand the benefits of our assistance. Our job is to take the legal burden off you so that you can stop worrying about the future and focus on caring for your disabled loved one well in the present.
Types Of Special Needs Trusts
Special needs trusts are the primary special needs planning tool that parents, family members, and legal caretakers of disabled individuals use to arrange their affairs. You can designate a trustee who will manage your financial assets on behalf of a disabled loved one according to your explicit wishes and instructions; the assets will not be owned in their name, which can prevent them from losing government aid.
Because special needs planning isn’t a one-size-fits-all process, different types of trusts exist to meet your needs. Our Valrico special needs planning lawyer can help you compare different trusts and choose the kind that most closely aligns with your goals for your loved one’s future. We can then help you establish that trust and avoid any legal issues.
There are two main categories of special needs trusts: first-party and third-party.
First-party trusts (also called “payback special needs trusts”, “litigation special needs trusts”, “Miller trusts”, “(d)(4)(A) SNT”, or “(d)(4)(C) SNT”) are those used to manage the disabled beneficiary’s own money, such as that received in a personal injury lawsuit, or a retirement plan, or divorce settlement, or an inheritance. This is an irrevocable trust, which means that the terms of the trust cannot be changed after the trust is created. The proceeds of a first-party trust can only be used for things not covered by government programs, and a mandatory reimbursement provision is included so government agencies are able to reclaim payments for benefits received after the beneficiary passes away (a drawback).
Third-party trusts are the most common type of trust, and are funded with assets from a parent, sibling, grandparent, or other party. A third-party trust can guarantee that your loved one will have the financial resources they need to enjoy the highest possible quality of life when you or their other caretakers are no longer living. In this type of trust, the beneficiary doesn’t legally own the assets and can’t make spending decisions; the money is managed by a trustee. After the beneficiary passes, the funds are not repaid to the state.
Ready To Learn More? Call An Experienced Valrico Special Needs Planning Lawyer Today.
Planning for the future of your loved one who has special needs can be emotionally challenging as well as legally difficult. Our Valrico special needs planning lawyer can keep the process as smooth and straightforward as possible and provide you with peace of mind. Call Osenton Law, P.A., to schedule a free consultation and get started.
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