Are There Different Kinds Of Special Needs Trusts?
There are basically three different kinds of special needs trusts. They include Third Party Trusts, Self-Settled Trusts, and Pooled Trusts.
What Is A Self-Settled Special Needs Trust?
A self-settled special needs trust is a trust created for monies received by a special needs person. The most common example would be if a special needs person received a large lawsuit judgment, maybe from medical malpractice, and that kind of money would otherwise disqualify the special needs person for public assistance benefits.
A self-settled special needs trust, therefore, is a trust created for a special needs person’s actual assets that were recovered. The funds would be transferred to the self-settled special needs trust and then could be used to provide for that special needs person in regards to things that public assistance benefits would not provide for.
What Is A Third Party Special Needs Trust Or A Supplemental Needs Trust?
A third party special needs trust is created by someone with their own assets and resources rather than the special needs child’s assets. The term “Supplemental Needs Trust” is just another term that is sometimes used for special needs trust. They are actually one and the same.
What Is The Special Needs Pooled Trust And When Should That Option Be Used?
A special needs pooled trust works best when the assets of the special needs trust are insufficient to cover a lot of major expenses, including trustee’s fees and the like. A special needs pooled trust is a trust with the assets of many different special needs individuals pooled in it. The assets are managed by an independent trustee or an independent state agency. Each special needs child’s proportionate share of that pool trust can be used to provide him or her with benefits that public assistance does not provide.
Are Special Needs Trusts Always Irrevocable?
It would be possible for me someone to create a revocable special needs trust that they could alter from time to time. Once the person creating the trust dies, then the trust would almost always become irrevocable so it cannot be changed so as to disqualify the trust as a special needs trust.
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