In a time of great debate over medical coverage, government programs and expanding deficits a Special Needs Trust can assure that your loved one receives the maximum benefits afforded by law and preserves the assets that may supplement and enhance their life. Special needs trusts are often established by the parents or relatives of a disabled child, with funds to be used to pay for supplemental or living expenses of the disabled person not paid by other sources. Special needs trusts can also be set up with the disabled person’s own funds, again to provide for supplemental medical or living expenses.
A Special Needs Trust is like other trusts: It is a separate, legal entity that allows the donors to gift assets to a second person, the trustee, to be used for the benefit of someone else—in this case, a special needs child or dependent adult. Funds from this type of trust are not used to pay for benefits that would otherwise be provided by state or federal programs.
To maximize the use of assets and income for a Special Needs trust it is often wise to enlist the help of an experienced financial advisor, a tax professional and an estate planning attorney.