What to know about Special Needs Trusts
At Collins Disability Law, Chicago’s #1 disability lawyer, we understand that special needs trusts are a critical component of providing for a loved one with a disability. With 20+ years of experience and 5-star ratings, we are fully insured and committed to helping our clients understand the legal aspects of special needs trusts and how they can benefit their loved ones. Read on to learn more about what special needs trusts are and what you should know.
A special needs trust is a legal tool used to provide financial security to a person with a disability while they are alive. This type of trust allows individuals with disabilities to preserve government benefits like Social Security, Supplemental Security Income, or Medicaid, while still receiving financial support from family members or loved ones. The trust is also used to pay for services or items that are not covered by government programs, such as recreational activities, adaptive equipment, or educational expenses.
A special needs trust is established by a family member or other third-party donor and managed by a trustee. The trustee is responsible for managing the trust assets and allocating funds for the beneficiary’s needs. The trustee must ensure that the funds are used solely for the benefit of the beneficiary and not for the trustee’s own benefit. When the beneficiary passes away, the remaining funds in the trust are distributed according to the terms of the trust.
When setting up a special needs trust, it is important to consider several factors. Here are some key things to consider:
• Legal Requirements: To ensure that the trust is valid, it must be set up in accordance with state and federal laws. You should consult with a qualified attorney or financial professional to ensure the trust is properly established.
• Funding Sources: The trust can be funded with a variety of sources, including cash, investments, real estate, and life insurance policies.
• Trust Administration: An experienced trustee must be chosen to manage the trust and ensure that it is administered in accordance with the trust’s terms.
• Tax Implications: Special needs trusts are subject to federal and state taxes, so it is important to be aware of the tax implications when setting up the trust.
At Collins Disability Law, we understand that establishing a special needs trust can be a complex process. We are here to provide the support and guidance you need to ensure that your loved one is provided for in the best way possible. With our expertise and experience, we are committed to helping you understand the legal aspects of setting up a special needs trust and ensuring that it is established in accordance with all applicable laws. Contact us today to learn more.
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