What Is The Process To Create A Special Needs Trust?
In regards to creating a third party trust, it is a matter of our client coming in to talk to us. We will look at the reasons they want the trust, what the specific disability is and what needs to be covered. Once the concerns and the needs are addressed, we will draft the trust accordingly.
Are Most People Are Even Aware That A Special Needs Trust Exists?
In my experience, many parents of special needs children do not realize special needs trusts exist.
Are Special Needs Trusts Complicated And Expensive To Set Up?
Special needs trusts can be complicated and at times expensive to set up. However, the bottom-line is that any complication or expense is dwarfed by the great value these trusts provide to a child with special needs who will need to be taken care of for the rest of his or her life.
Should All Of The Estate Be Funneled To The Remaining Children With The Expectation They Will Care For The Special Needs Child?
More often than not, parents initially tell me they want to funnel the estate to the remaining children with the expectation they will care for the child with special needs. The reason behind this is they do not want that child to be disqualified from receiving benefits.
However, this is a very poor planning idea. Things can happen that inadvertently divert funds away from the special needs child. For example, should that child’s brother die and his wife inherits all of the money that was intended for the special needs child, she might spend it in a different way.
What Mistakes Do Families Make When Considering Setting Up A Special Needs Trust?
The mistake families make is not taking care of their own estate planning which would provide for a special needs trust in the first place. People tend to procrastinate out of a belief they still have plenty of time to do it, or they simply do not like addressing the subject of their own death.
The biggest mistake that families make is they do not educate themselves about the rules for special needs trusts. They do not even realize that by setting up a trust like this, they are able to provide resources for their child that would not disqualify the child from obtaining governmental benefits.
Can One Trust Be Used For Two Children Who Both Have Special Needs?
Theoretically, this could be done, but it is not a good idea because each of the two special needs children have different needs. If one child has needs that are far more expensive than the other, then the funds may end up being disproportionately used for one child and there might not be sufficient resources left to take care of the other.
For more information on Setting Up A Special Needs Trust, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling 314-454-9100 ext.125 today.
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