Top 10 Frequently Asked Questions on Special Needs Trust

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1. What is a special needs trust?

A special needs trust is a legal arrangement created to provide financial support for individuals with disabilities while maintaining their eligibility for government benefits.

2. Who can benefit from a special needs trust?

Any person with a disability who is receiving or may be eligible for government benefits, such as Medicaid or Supplemental Security Income (SSI), can benefit from a special needs trust.

3. What are the advantages of a special needs trust?

A special needs trust can provide financial support for an individual with disabilities without affecting their eligibility for government benefits. It can also help to protect their assets and ensure that their financial needs are met throughout their lifetime.

4. How is a special needs trust funded?

A special needs trust can be funded with a variety of assets, including cash, stocks, bonds, real estate, and other property. It is important to work with an experienced attorney to ensure that the trust is properly funded.

5. Who can create a special needs trust?

A special needs trust can be created by anyone, including the person with a disability, their family members, or their legal guardian.

6. What are the different types of special needs trusts?

There are two main types of special needs trusts: first-party trusts and third-party trusts. First-party trusts are funded with the assets of the person with a disability, while third-party trusts are funded with assets from someone other than the person with a disability.

7. Are special needs trusts subject to Medicaid recovery?

First party special needs trusts are subject to Medicaid recovery. Third party special needs trusts are not subject to Medicaid recovery.

8. How is a special needs trust managed?

A special needs trust is managed by a trustee, who is responsible for investing the trust assets and distributing funds to the beneficiary in accordance with the terms of the trust.

9. Can a special needs trust be used for anything?

No, a special needs trust must be used to provide for the beneficiary’s supplemental needs, such as housing, education, and medical expenses. It cannot be used to pay for basic needs that are already covered by government benefits.

10. What happens to a special needs trust when the beneficiary dies?

When the beneficiary of a special needs trust dies, any remaining assets in the trust may be distributed to their heirs or to a charity, depending on the terms of the trust. It is important to work with an experienced attorney to ensure that the trust is properly drafted and that the beneficiary’s wishes are carried out.

Mark