Special Needs Trusts: The Basics

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SPECIAL NEEDS TRUSTS
The Basics
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• A TRUST is an estate planning tool that allows
  you to set aside money and other assets for a
  beneficiary for a particular purpose

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The TRUSTEE you select to hold and manage that
property will be responsible for making certain
that the terms of the trust are fulfilled
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Trusts are a vital tool in estate planning
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This is especially true when the future needs of
a disabled individual are at issue
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• A Special Needs Trust is a particular type of
  trust meant just for that purpose providing
  future care for someone who is disabled

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When the caregiver of a disabled individual is
no longer capable of caring for that person,
the trust will provide the assets necessary to
continue care
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• A Special Needs Trust is irrevocable (cannot be
  canceled) and the assets in the trust are
  protected from lawsuits and creditors

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A Special Needs Trust also protects the funds so
they do not count as financial assets for
eligibility purposes when applying for government
benefits
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Two Basic Types of Special Needs Trusts
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• There are two types of
• Special Needs Trusts

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A General Support Special Needs Trust is seen as
the primary source of benefits for the disabled
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• A Supplemental Care Special Needs Trust, which is
  the most common type, is a secondary source of
  benefits after government benefits are exhausted

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What Needs Are Covered?
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• SPECIAL NEEDS
• is a comprehensive term that includes medical and
  health-care services as well as
• a wide variety of related services that increase
  the beneficiarys quality of life

a
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All of these options can be tailored to the needs
and circumstances of each intended beneficiary
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• When the beneficiarys medical needs are provided
  for, the Special Needs Trust can also provide
  additional services, such as assistance with
  daily living activities

b
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Providing respite care for the primary caregiver,
is also an important consideration
c
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The trust assets can pay for living arrangements
or renovations needed to the beneficiarys home
d
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Types of Special Needs Trusts
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• Determining the appropriate type of Special Needs
  Trust requires consideration of many factors such
  as
• to whom the assets belong and whether they are
  likely to cover the full cost of support and care
  for the beneficiary

to whom the assets belong
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whether they are likely to cover the full cost of
support and care for the beneficiary
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General Support vs. Supplement Care
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• If the assets and resources will
• likely be sufficient,
• then a General Support Special Needs Trust may be
  the right choice

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Otherwise, if need-based government programs will
play a critical role in funding the beneficiarys
care, then a Supplemental Care Special Needs
Trust may be the appropriate solution
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How Is A Special Needs Trust Established?
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• A Special Needs Trust can be created during the
  lifetime of the caregiver or through the last
  will and testament

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The trust becomes effective when it is signed
and notarized
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A tax identification number must be obtained
from the IRS and then a bank account will be
opened with a minimum deposit
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At that point the trust can be funded through a
variety of estate planning tools
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• Usually, the GRANTOR (the person executing the
  trust document)
• names himself or herself as TRUSTEE

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Another person should also be named as the
successor trustee to take over the trust if the
initial trustee dies, becomes incapacitated or
resigns
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• Anyone who acts as the trustee is legally bound
  to follow the terms of the trust document and use
  the property only for the benefit of the person
  with special needs, as identified in the terms of
  the trust

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Learn More About Special Needs Trusts in
Fayetteville Arkansas
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Click to visit arkansas-estateplanning.com