When someone you love has special needs one of your greatest fears is what will happen to them should you no longer be able to provide for their care. At Carolina Estate Planning, Attorney Jeffery Bloomfield can help assuage your fears through careful estate planning. Together, you will discuss your objectives and create a special needs trust, or trusts, to accomplish your goals.
Purpose of Special Needs Trusts
Special needs trusts serve more than one purpose. A properly executed trust will provide the beneficiary with the income needed to meet their obligations while providing the protection needed to preserve the beneficiaries government funded benefits. This includes Medicaid, Social Security Income, and subsidized housing.
Types of Special Needs Trusts
A trust is a fiduciary relationship through which a trustor can have a third party, or trustee, hold and direct funds for the benefit of a beneficiary. Depending on your goals and funding sources, there are several different types of special needs trusts that you can create. They include:
Third-Party Special Needs Trusts
A Third-Party Special Needs Trust is set-up and funded by someone other than the beneficiary. They are typically established by parents and grandparents of a disabled child to ensure the child’s needs will continue to be met after they are gone. Funds placed in a Third-Party Special Needs Trust will have no bearing on the disabled person’s ability to receive government funded benefits and cannot later be claimed by the state government for reimbursement.
First-Party Special Needs Trusts
A First-Party Special Needs Trust is also known as a Self-Settled Special Needs Trust. With these types of trusts, a third party or the disabled person themselves is the funding source and the beneficiary cannot be over 65 years of age. Once the beneficiary passes away, any funds remaining in the trust must be paid back to the state government as reimbursement for any Medicaid benefits the beneficiary received. Also, a First-Party Special Needs Trust is irrevocable. This means that the terms of the trust cannot be altered nor can the trust itself be terminated.
Pooled Special Needs Trust
A Pooled Special Needs Trust can be categorized as a type of First-Party Special Needs Trust due to the fact that it can be established by the beneficiary. It differs from the typical First-Party Special Needs Trust in that a Pooled Special Needs Trust can be a conglomeration of funds “pooled” from multiple sources. Also, the trustee must be a non-profit organization.
Contact Jeff for Special Needs Trust Planning Assistance
I encourage you to contact me, Attorney Jeff Bloomfield, with any questions or concerns you may have about special needs trusts and how they can benefit you and your loved ones. My telephone number is 336-221-4457, or you may contact me via my contact page. I take pride in my ability to help individuals craft a plan to ensure their most vulnerable loved ones are cared for after they are gone.