San Diego Estate Planning Lawyer Blog
In our last blog, we discussed how a special needs trust may be a necessary part of your estate plan if you want to provide for an individual with a disability. A special needs trust, sometimes called a supplemental needs trust is one that must contain specific language and must be tailored to fit the needs of the special needs beneficiary. Since the special needs trust is designed to manage inheritances and other resources of a disabled person while maintaining the individual’s eligibility for public assistance, it should be drafted by an estate planning attorney familiar with special needs trusts.
A third party special needs trust is the type of trust set up by parents, grandparents, or other individuals for the benefit of the disabled beneficiary. The beneficiary must be under the age of 65 and disabled. The persons setting up the trust are the grantors of the trust. The trust is funded with resources other than those of the beneficiary such as a cash inheritance after the death of the grantors or insurance proceeds. The person who will manage the third party special needs trust is the trustee, but cannot be the beneficiary.
The trust gives the trustee or the successor trustee the absolute discretion to make distributions for “special needs” the beneficiary may have such as supplemental medical care, transportaton, education, computers, and other items which may enhance the quality of life of the disabled person. The trust is to supplement, not replace what the public assistance covers. The trustees may be the parents, grandparents, or siblings of the special needs beneficiary or a private professional fiduciary with experience in special needs trust administration.
Special needs trust can also authorize expenditures for final burial or cremation. Upon the death of the special needs beneficiary, the balance of the assets in the trust will pass to whoever the grantor(s) determined should be the beneficiaries. These could be the grantors, siblings of the beneficiary, children of the beneficiary, or even charities.
The estate planning attorneys at Scott C. Soady, A Professional Corporation can assist you with setting up the appropriate special needs trust. To discuss your particular situation and learn more about third party special needs trust, contact us for a complimentary consultation.