When it comes to planning your wealth and taking care of all family members, it is essential that you look into all options fully. If you have a child that has a severe illness or disability for example, you may want to set up a trust that can help to support them with everything that they need. In desiring this, you may want to set up a special needs trust.
However, creating a typical special needs trust can create some disadvantages for your beneficiary. For example, if your child receives disability benefits, then having a trust in their name could disqualify them from these benefits. In order to prevent this problem from occurring, you can decide to create a third-party special needs trust instead.
What is a third-party special needs trust?
A third-party special needs trust is set up to solve the problems that can occur with a special needs trust. It means that the beneficiary does not own the assets in the trust; therefore, he or she is not made exempt from the state benefits that he or she already receives. If they receive Medicaid, for example, then they will still be entitled to the associated benefits while being able to have their living costs covered by the third-party special needs trust.
As part of the planning of your estate, you may want to set up a third-party special needs trust in order to provide for the well-being of a loved one. It is important to make sure that such a decision will be beneficial to your specific circumstances. For additional information, please contact the Quinn Law Firm at 814-806-2518 to talk with one of our attorneys that specializes in trusts.
Source: Investopedia, “The Benefits of a Third-Party Special Needs Trust,” accessed Dec. 22, 2017