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Are there trusts that can help someone who has special needs?

Most Florida residents only want the best for their loved ones and they will always try to provide for them even after they are gone by including them as estate beneficiaries. However, some of these family members may have special physical, mental or emotional needs and they may be receiving benefits from government programs such as Medicaid and Social Security. Inheriting assets from an estate could jeopardize their ability to continue to receive these government benefits. So, is there a way to pass assets on to a special needs family member without them losing their benefits?

Special needs trusts are designed with just this purpose in mind. They can help take care of someone who can’t take care of themselves without causing them to lose any government benefits they may be receiving. In a traditional situation, the government would consider any distribution from an estate to be income, which could then jeopardize their benefits. However, with a special needs trust, a trustee, and not the beneficiary, assumes control of the assets that were placed in the trust. Federal programs such as Social Security cannot consider these assets as beneficiary income. Therefore, the special needs person can remain in any government program in which they are enrolled.

Special needs trusts also have another valuable benefit: they can protect any proceeds that were awarded because of a lawsuit. If the special needs family member was part of a successful lawsuit, then the benefits obtained from that lawsuit can be placed in a special needs trust for that individual. If that individual is sued afterwards, those benefits that are part of the special needs trust cannot be used for any settlement.

A special needs trust is a unique estate planning tool that can be useful in different situations. However, any Florida resident who is interested in developing a special needs trust may want to speak to an estate planning attorney in order to discover if this kind of trust could provide valuable benefits.

Source: FindLaw, “Special Needs Trusts FAQ’s,” Accessed Feb. 29, 2016

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