Special Needs Planning

What do you need to know?

Statistics show that over 48.9 million people in the United States have a disability. That is nearly 1 in 7 residents.   So it is not uncommon to have a special needs person in the family. Many individuals with special needs are receiving government benefits or may need to receive them in the future. Special needs planning allows a special needs beneficiary to receive an inheritance without losing their government benefits. Special needs planning typically requires the use of a trust to provide for the special needs beneficiary. 

Special Needs Trust

One type of special needs trust allows a parent, grandparent or guardian to provide funds to a stand alone trust for the benefit of a special needs individual without disrupting their government benefits. 

Special needs trust provisions can also be incorporated into a revocable living trust to provide for a special needs individual.  The special needs trust names a trustee to manage the special needs individual's assets and make distributions on behalf of the special needs individual in a way that does not cause that individual to be disqualified from receiving government benefits.

A special needs trust may be funded during the lifetime of the parent or grandparent or after her death by making the special needs trust the beneficiary of her will or trust. A special needs trust can also be funded by naming the special needs trust as a beneficiary of a life insurance policy.

A special needs trust can provide that the trustee apply funds owned by the trust for the beneficiary's supplemental or special needs during the beneficiary's lifetime. In some circumstances the special needs trust will allow for funds not applied for the special needs beneficiary's benefit to be distributed to other family members or others upon the death of the special needs beneficiary. 

Each family has unique circumstances. It can be beneficial to sit down with an estate planning attorney to discuss your family's needs. At Schneider Rasche LLC, we are committed to helping families with a special needs beneficiary draft an estate plan that will protect that beneficiary's interest.  Call us today at (503) 241-1215 or contact us online to find out how to start your estate plan.

Estate Planning Article

This report is compliments of Schneider Rasche LLC and was written by The American Academy of Estate Planning Attorneys.

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