October is Special Needs Planning Month

A special needs trust (SNT) is a specific type of trust to provide for an individual who is disabled without jeopardizing his or her eligibility for possible government or long-term care benefits. The definition of disabled and special needs varies from state to state, so please ensure that you are working with a qualified estate planning attorney who can assist in the drafting, execution, and potential administration of this type of trust.

Special needs trusts differ from standard trusts in that they are intended to supplement, rather than replace, government benefits. To best protect the beneficiary, these trusts must meet certain requirements. Again, these can vary state by state, but in general, the following requirements must be met:

• Funds in the special needs trust may not be directly available to the beneficiary.
  
  
• The beneficiary cannot revoke the trust.
  
  
• The individual with special needs must be considered “permanently and totally disabled” under Social Security Insurance criteria. Note that these rules differ between adults and children.
  
  
• The trustee may not be permitted to make payments or distributions that may interfere with government benefit eligibility.

As stated above, SNTs are used in slightly different situations than a standard trust would be used for your children or heirs. An SNT includes specific, limiting language to prevent distributions from occurring that may inadvertently disqualify your child or beneficiary from the government benefits they are entitled to.

Special needs trusts are important because they can help to augment your beneficiary’s quality of life. Government benefits can only provide for so much, and the SNT and its trustee can step in and expand the resources required to cover your beneficiary’s care needs.

Because of the complexity around special needs trusts, on both the drafting and administration sides, it is imperative that you have a trusted advisor you can work with to ensure that your beneficiary and their long-term care are supported. Our Mission Wealth advisors get to know you and your family first in order to have a greater understanding of your goals and needs.  We have deep expertise and connections, and are able to help you partner with the best attorneys and corporate trustee services to implement and execute your trust. As your family’s main point of contact, Mission Wealth can continue to oversee your legacy as it is used to take care of your beneficiaries, now and in the future.

If you are interested in working with Mission Wealth, please don’t hesitate to contact us below.

Estate planning with wealth can be complicated, but it doesn’t need to be. Our Director of Estate Strategy Andrew Kulha would be happy to discuss your options and review your specific estate planning goals. Learn more about our estate planning review here.