Feb 2, 2014

Advantages of setting up your child's Special Needs Trust right now

When a special needs child turns 18, any monies in his/her name will be considered a countable asset when determining eligibility for SSI, Medicaid, and other government benefits. Most parents understand the importance of setting up a Special Needs Trust (SNT) to protect the child's eligibility for these critical government benefits, and to enhance the child's lifestyle and welfare. However, many parents fail to understand that it is advantageous to set up an SNT as soon as possible. It is not necessary to wait to establish the SNT until the child turns 18, or even until funds are available to place in the trust. 

Once the parent has set up the SNT, the parents can name the trust as one (or sole) death beneficiary of his/her life insurance policy and other assets, such as a pension. Of course, parents can also transfer funds into the trust while they are alive, naming themselves as trustees, and naming successor trustees for the point at which they can no longer serve due to death or incapacity.

Chances are grandparents and other family members would also like to contribute to the child's present and future welfare and maintenance. Rather than each relative having to set up his/her own SNT for the child, the one SNT the parent creates can be the one legal depository to which everyone can contribute. Just like the parents, relatives can either transfer funds into the SNT while they are alive, or upon their death by naming the SNT a beneficiary in their will or trust.

A Special Needs Trust is an extraordinarily complicated instrument. You want the best for your disabled loved one, so this is an area in which "penny wise, pound foolish" can be truly disastrous. Contact our Florida estate planning/elder law attorneys for guidance.

No comments:

Related Posts Plugin for WordPress, Blogger...