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Special Needs Trust

Special Needs Trust Lawyer

“Secure Your Loved One’s Future with a Special Needs Trust”

Introduction

A Special Needs Trust (SNT) is a trust created to provide financial support for individuals with disabilities. It is designed to supplement, not replace, government benefits such as Supplemental Security Income (SSI) and Medicaid. The trust is managed by a trustee who is responsible for managing the trust assets and making distributions to the beneficiary. The trust can be used to pay for medical expenses, educational expenses, and other items that are not covered by government benefits. The trust can also provide a source of income for the beneficiary. The trust can be established by a parent, grandparent, or other family member, or it can be established by a court. The trust can be funded with cash, investments, real estate, or other assets. The trust can also be funded with a life insurance policy. The trust is designed to provide financial security for the beneficiary while preserving their eligibility for government benefits.

How to Use a Special Needs Trust to Protect Government Benefits for a Disabled Person

A Special Needs Trust (SNT) is an important tool for protecting government benefits for a disabled person. An SNT is a trust that is established for the benefit of a disabled person, and it is designed to supplement, not replace, government benefits.

When setting up an SNT, it is important to ensure that the trust is properly drafted and administered. The trust should be drafted to meet the requirements of the particular government benefits program, such as Supplemental Security Income (SSI) or Medicaid. The trust should also be drafted to ensure that the disabled person is the sole beneficiary of the trust.

The trust should be administered by a trustee who is knowledgeable about the government benefits program and the trust’s purpose. The trustee should be familiar with the rules and regulations of the government benefits program and should be able to ensure that the trust is administered in accordance with those rules.

The trust should also be funded with assets that are not considered countable resources for the government benefits program. This means that the assets in the trust should not be counted as part of the disabled person’s resources when determining eligibility for the government benefits program.

The trust should also be structured to ensure that the disabled person is able to access the funds in the trust for supplemental needs, such as medical care, education, and other expenses. The trust should also be structured to ensure that the funds are not used for basic needs, such as food and shelter, which would be provided by the government benefits program.

By properly setting up and administering an SNT, it is possible to protect government benefits for a disabled person while providing supplemental funds for their needs. An SNT can be an invaluable tool for ensuring that a disabled person is able to access the resources they need to live a full and independent life.

What to Consider When Choosing a Trustee for a Special Needs Trust

When choosing a trustee for a special needs trust, it is important to consider several factors. First, the trustee should have a thorough understanding of the trust’s purpose and the beneficiary’s needs. The trustee should be familiar with the laws and regulations governing special needs trusts, as well as the tax implications of the trust.

Second, the trustee should have the necessary skills and experience to manage the trust. This includes having the ability to make sound financial decisions, as well as the ability to manage the trust’s assets. The trustee should also have the time and resources to properly administer the trust.

Third, the trustee should be trustworthy and reliable. The trustee should be someone who is willing to act in the best interests of the beneficiary and who will not take advantage of the trust’s assets.

Finally, the trustee should be someone who is willing to communicate with the beneficiary and other parties involved in the trust. The trustee should be willing to answer questions and provide updates on the trust’s progress.

Choosing the right trustee for a special needs trust is an important decision. It is important to take the time to find a trustee who is knowledgeable, experienced, and trustworthy.

How to Create a Special Needs Trust for a Loved One

Creating a special needs trust for a loved one is an important step in ensuring their financial security and quality of life. A special needs trust is a legal document that allows a person with a disability to receive money or other assets without losing eligibility for government benefits. It also allows the trust to pay for items and services that are not covered by government programs.

The first step in creating a special needs trust is to consult with an attorney who specializes in estate planning and special needs trusts. An attorney can help you understand the legal requirements and provide guidance on how to structure the trust.

The trust document should include the name of the beneficiary, the purpose of the trust, and the trustee. The trustee is the person who will manage the trust and make decisions about how the money is used. The trust document should also include instructions on how the money should be used, such as for medical expenses, education, housing, or other needs.

Once the trust document is complete, it must be signed by the beneficiary and the trustee. The trust must also be funded with assets, such as cash, investments, or real estate. The assets must be transferred to the trust in accordance with state law.

Finally, the trust must be registered with the state and the Social Security Administration. This will ensure that the trust is recognized as a valid legal entity and that the beneficiary will not lose eligibility for government benefits.

Creating a special needs trust for a loved one is an important step in ensuring their financial security and quality of life. With the help of an experienced attorney, you can create a trust that meets the needs of your loved one and ensures that their future is secure.

Understanding the Different Types of Special Needs Trusts

Special needs trusts are an important tool for providing financial security for individuals with disabilities. They are designed to supplement government benefits and provide additional resources for the beneficiary’s care and quality of life. There are several different types of special needs trusts, each with its own unique features and benefits.

The first type of special needs trust is a self-settled trust. This type of trust is funded with the beneficiary’s own assets, such as an inheritance or a personal injury settlement. The trust is designed to provide supplemental resources for the beneficiary’s care without affecting their eligibility for government benefits.

The second type of special needs trust is a third-party trust. This type of trust is funded with assets from someone other than the beneficiary, such as a parent or grandparent. The trust is designed to provide supplemental resources for the beneficiary’s care without affecting their eligibility for government benefits.

The third type of special needs trust is a pooled trust. This type of trust is managed by a non-profit organization and is funded with the assets of multiple beneficiaries. The trust is designed to provide supplemental resources for the beneficiary’s care without affecting their eligibility for government benefits.

The fourth type of special needs trust is a payback trust. This type of trust is funded with the beneficiary’s own assets, such as an inheritance or a personal injury settlement. The trust is designed to provide supplemental resources for the beneficiary’s care without affecting their eligibility for government benefits. Upon the death of the beneficiary, the trust must pay back any remaining funds to the government.

Each type of special needs trust has its own unique features and benefits. It is important to understand the differences between the various types of trusts in order to determine which one is best suited for your particular situation. An experienced attorney can help you understand the different types of special needs trusts and determine which one is right for you.

What is a Special Needs Trust and How Can it Benefit a Disabled Person?

A Special Needs Trust (SNT) is a type of trust that is specifically designed to provide financial support for a disabled person without jeopardizing their eligibility for government benefits. The trust is typically funded by a third party, such as a family member or friend, and is managed by a trustee who is responsible for making sure the funds are used for the benefit of the disabled person.

The primary purpose of a Special Needs Trust is to supplement the government benefits that the disabled person is already receiving. The trust can be used to pay for items and services that are not covered by government benefits, such as medical expenses, educational expenses, recreational activities, and other items that may improve the quality of life for the disabled person.

A Special Needs Trust can also be used to provide financial security for the disabled person in the event of the death of the third-party donor. The trust can be used to pay for funeral expenses, as well as provide a source of income for the disabled person.

In addition to providing financial support, a Special Needs Trust can also provide peace of mind for the disabled person and their family. The trust can be used to ensure that the disabled person’s needs are met, even if the third-party donor is no longer able to provide financial support.

Overall, a Special Needs Trust can be a valuable tool for providing financial support and security for a disabled person. It can help to ensure that the disabled person’s needs are met, while also protecting their eligibility for government benefits.

Why You Need a Special Needs Trust Lawyer To Help You.

When it comes to planning for the future of a loved one with special needs, it is important to have the right legal guidance. A special needs trust lawyer can help you create a trust that will provide for the long-term care and financial security of your loved one.

A special needs trust is a legal document that allows you to set aside money or other assets for the benefit of a person with special needs. The trust can be used to pay for medical expenses, educational expenses, and other costs associated with the care of the beneficiary. The trust can also be used to provide for the beneficiary’s future needs, such as housing, transportation, and other necessities.

A special needs trust lawyer can help you create a trust that meets the specific needs of your loved one. The lawyer can help you determine the best way to structure the trust, as well as the best way to manage the trust’s assets. The lawyer can also help you understand the tax implications of setting up a trust and can provide advice on how to ensure that the trust is properly funded.

A special needs trust lawyer can also help you navigate the complex legal and financial issues associated with setting up a trust. The lawyer can help you understand the laws and regulations that govern trusts, as well as the various tax implications of setting up a trust. The lawyer can also provide advice on how to ensure that the trust is properly funded and managed.

Having a special needs trust lawyer on your side can help you ensure that your loved one’s future is secure. The lawyer can provide you with the legal guidance and advice you need to create a trust that meets the specific needs of your loved one. With the right legal guidance, you can ensure that your loved one’s future is secure and that their needs are met.

Q&A

1. What is a Special Needs Trust?
A Special Needs Trust (SNT) is a trust created for the benefit of a person with a disability. It is designed to supplement, not replace, government benefits such as Supplemental Security Income (SSI) and Medicaid.

2. Who can create a Special Needs Trust?
A Special Needs Trust can be created by a parent, grandparent, legal guardian, or court.

3. What are the benefits of a Special Needs Trust?
A Special Needs Trust can provide additional resources to a person with a disability without jeopardizing their eligibility for government benefits. It can also provide for the person’s medical and other needs that are not covered by government benefits.

4. What types of assets can be placed in a Special Needs Trust?
Assets that can be placed in a Special Needs Trust include cash, stocks, bonds, real estate, and other investments.

5. Who manages the assets in a Special Needs Trust?
The assets in a Special Needs Trust are managed by a trustee, who is responsible for investing and managing the trust assets in accordance with the trust document.

6. What happens to the assets in a Special Needs Trust when the beneficiary dies?
When the beneficiary of a Special Needs Trust dies, the assets in the trust are distributed according to the terms of the trust document. Any remaining assets may be distributed to the beneficiary’s heirs or to charity.

Special Needs Trust Consultation

When you need help with a Special Needs Trust call Jeremy D. Eveland, MBA, JD (801) 613-1472 for a consultation.

Jeremy Eveland
17 North State Street
Lindon UT 84042
(801) 613-1472

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Special Needs Trust

Different Trust Types

If you’ve been doing research on the subject of estate planning, you’ve likely run into a lot of different acronyms and trust-types. It can be hard to keep track of them all!

The most common type of trust that most people encounter is the revocable living trust. So first, if you haven’t already, you might want to start by reading some other FAQs:

What is a revocable living trust?

A revocable living trust is a legal arrangement whereby a person (the grantor) transfers ownership of their assets to another person (the trustee) for the purpose of managing those assets for the benefit of the grantor or a third party (the beneficiary). This arrangement is revocable, meaning that the grantor can make changes to the trust or terminate it at any time. Unlike a will, the trust is not subject to probate and the assets pass directly to the beneficiary without the need for court approval.

A revocable living trust can be used in many different ways. For example, it may be used to provide for the care of a minor child or an incapacitated adult, to provide for the management of a disabled person’s assets, or to provide for an orderly distribution of assets upon death. It can also be used to avoid probate, minimize estate taxes, and protect assets from creditors.

The grantor retains control of the trust and can modify or revoke it at any time. The grantor also has the power to appoint a successor trustee in the event of their death or incapacity. The trustee will have the power to manage the trust assets in accordance with the terms of the trust agreement.

The revocable living trust is a powerful estate planning tool that can help individuals manage their assets during their lifetime and provide for their beneficiaries upon death. It can also provide a measure of privacy, since the details of the trust do not become public record upon death. As with any legal arrangement, it is important to consult with a qualified attorney to ensure that the trust meets your individual needs.
What are some of the benefits of a revocable living trust?

What’s the Difference between a Testamentary Trust, a Revocable Living Trust, and an Irrevocable Living Trust?

A testamentary trust is a trust created by a will upon the death of the grantor and funded with the grantor’s assets after death. A revocable living trust is a trust created during the grantor’s lifetime and the grantor retains the right to revoke or modify the trust. An irrevocable living trust is a trust created during the grantor’s lifetime and the grantor cannot revoke or modify the trust.

The main difference between a testamentary trust, a revocable living trust, and an irrevocable living trust is the time of creation and the ability to modify or revoke the terms of the trust. A testamentary trust is created upon the death of the grantor, while a revocable living trust and an irrevocable living trust are created during the grantor’s lifetime. Additionally, the grantor of a revocable living trust can modify and revoke the trust, while the grantor of an irrevocable living trust cannot modify or revoke the trust.

All three types of trusts can be used for a variety of purposes, including estate planning, asset protection, and tax planning. However, testamentary trusts and irrevocable living trusts are often used for estate planning purposes since they allow for the grantor to control how their assets are distributed after death. Revocable living trusts, on the other hand, are often used for asset protection and tax planning purposes since they allow the grantor to protect their assets and minimize their tax liability.

Ultimately, testamentary trusts, revocable living trusts, and irrevocable living trusts each have their own unique advantages and disadvantages, and it is important to consult with an experienced estate planning attorney to determine which type of trust best fits your needs.

Estate planning strategies which work well while interest rates are low include, intra-family loans, grantor retained annuity trusts (GRATs), sales to intentionally defective grantor trusts (IDGTs) and charitable lead annuity trusts (CLATs). When rates are higher, more efficient and commonly deployed strategies include charitable remainder annuity trusts (CRATs) and qualified personal residence trusts (QPRTs). If you are thinking about estate planning, in the midst of such planning, or even if your wealth transfers are complete, prevailing interest rates can have a significant impact on the effectiveness of your planning.

A trust can be created for a variety of reasons including for income or estate tax purposes, veterans benefits planning, Medicaid planning, asset protection planning, charitable planning, or for business succession purposes.

Here’s a guide to help you understand some of the other types of trusts:

Asset Protection Trust

: An asset protection trust is generally a generic name used to refer to a trust that has been set up for asset protection purposes such as to reduce exposure to lawsuits and malpractice claims, bankruptcy, creditors, divorce or remarriage, or nursing home expenses. Asset Protection Trusts come in many different forms depending upon who you are trying to protect (you or other beneficiaries) and what you’re trying to protect from (lawsuits, creditors, divorce, taxes, etc.).

Charitable Lead Trust

: Under a charitable lead trust, a designated charity receives income from the assets held by the trust and the assets then later pass to beneficiaries named by the Trustmaker. Charitable lead trusts may be used for tax planning purposes to take advantage of charitable deductions associated with the gifts being made.

Charitable Remainder Trust

: A charitable remainder trust is essentially the converse of a charitable lead trust. With a charitable remainder trust, the Trustmaker or a beneficiary designated by the Trustmaker receives income from the trust for a specified period of time, such as the Trustmaker’s lifetime or a designated period of years. When the income beneficiary’s interest ends, the trust assets then passed to a designated charity. Again, charitable remainder trusts may be used for tax planning purposes to take advantage of charitable deductions associated with the charitable bequests being made.

Credit Shelter Trust

: In our office, we tend to call these the “Family Trust”. They are also sometimes referred to as a “bypass trust.” Without getting too bogged down in estate tax law, it’s an estate tax planning tool used with a revocable living trust for a married couple to ensure that as a couple, they maximize their estate tax exemption (the amount that you can pass free of estate taxes).

Education Trust

: This is a tool sometimes used by parents or grandparents that want to set aside funds for college expenses while receiving estate tax benefits.

Equestrian Trust (ET)

: An equestrian trust is a form of Pet Trust for horses.

Grantor Retained Annuity Trusts (GRATs), Grantor Retained Unitrusts (GRUTs)

: These are trusts that provide certain tax benefits. Generally, the Trustmaker transfers an asset that is expected to significantly grow in value to the trust for less than its full market value. GRATs and GRUTs may be used to remove the full value of the asset and its future appreciation from the Trustmaker’s taxable estate to reduce future estate taxes upon death.

This is a trust used to set aside a certain amount of funds to provide for the continued care of one’s pets such as horses, dogs, cats, tropical birds, or other pets. A pet trust allows you to leave detailed instructions about how you want the pet provided for, who will provide care and ensure there are sufficient financial resources to provide such care without burdening your loved ones with such responsibility or financial burden. A Pet Trust is strongly recommended when you have pets with a longer lifespan (e.g., horses, tropical birds, etc.) and/or pets that are costly to maintain (e.g., horses, show dogs, etc.).

Grantor Trust

The term “Grantor Trust” is used to refer to a trust that is taxed to the Grantor (the person that created the trust) for either income tax purposes, estate tax purposes, or both.

Heir Safeguard Trust

: An Heir Safeguard Trust is a term used in Family Estate Planning to refer to a trust that has been designed to protect the inheritance from the beneficiary’s future potential lawsuits, creditors, or divorce.

Intentionally Defective Grantor Trust (IDGT)

: Intentional or not, who wants to be told they have a defective trust, right? The name of these trusts refers to the somewhat contradictory tax treatment that they receive. The trust terms are drafted such that the assets held by the trust will not be counted as part of your taxable estate for estate tax purposes. But at the same time, the trust agreement includes an intentional ‘flaw’ that allows you to continue paying the income taxes on the assets (and by making such payments yourself instead of by your children, this continues to further reduce your taxable estate). This can be a particularly appealing tax planning option if interest rates are low and/or values of the assets have depreciated such as during a real estate or stock market downturn.

Inter Vivos Trust

: Inter Vivos Trust is Latin for a Living Trust. The term “Living Trust” simply refers to a trust that comes into being during the Trustmaker’s lifetime rather than a Testamentary Trust which does not come into creation until after the Trustmaker’s death.

IRA Trust

: An IRA Trust refers to a trust that is specially designed for retirement plans such as individual retirement accounts (IRAs), 401(k)s, 403(b)s, and similar. Generally, the purpose of the Stretchout Protection Trust is to protect the income-tax benefits of the retirement plan while also protecting the retirement plan from future lawsuits, creditors, or divorce.

Irrevocable Trust

: Irrevocable trusts are used for many different reasons. With a Revocable Living Trust, you have the right to amend any or all of the terms or revoke it entirely. At its most basic level, an irrevocable trust means that somewhere in the trust document there is a power that you gave up permanently and cannot change without either court approval or the approval of all of the trust beneficiaries. For example, you may have given up the right to withdraw principal or change the beneficiaries. Thus, these trusts tend to be a bit more “set in stone,” but the degree to which they are set in stone depends on their purposes. For example, some of the irrevocable trusts that we use for Medicaid planning and veterans benefits planning still have some flexibility. Other irrevocable trusts are used for tax planning purposes and are much more rigid because the IRS rules require them to be.

Irrevocable Income-Only Trust

: This is a type of living trust frequently used for asset protection during retirement and planning for potential eligibility for Medicaid benefits for nursing home care. With an Irrevocable Income-Only Trust, a person transfers assets to an Irrevocable Trust for the benefit of other beneficiaries (such as children or grandchildren), but retains the right to continue receiving any income generated by the trust assets (such as interest and dividends). The Trustmaker also typically retains the right to continue using and living in any real estate held by the trust and can change the beneficiaries of the trust. The Trustmaker may be able to access the trust funds indirectly through the children or grandchildren.

Irrevocable Life Insurance Trust (ILIT)

: This is a common form of irrevocable trust used for estate tax planning purposes and to keep the proceeds of life insurance protected from future lawsuits or creditors. An Irrevocable Life Insurance Trust holds one or more life insurance policies (and it can also hold other assets). Under the federal estate tax rules, the death benefits of any life insurance policies that you own will be counted as part of your gross taxable estate and may be subject to estate taxes. If the life insurance policies are instead owned by a properly created Irrevocable Life Insurance Trust, then upon your death the life insurance proceeds will not be included as part of your taxable estate. The tax rules for proper setup and maintenance of an Irrevocable Life Insurance Trust are extremely strict.

Lifetime QTIP Trust (or Inter Vivos QTIP Trust)

A Lifetime Qualified Terminable Interest Property Trust, often referred to as a Lifetime QTIP Trust or Inter Vivos Trust, refers to a QTIP Trust established during the Trustmaker’s lifetime. See below for a definition of a QTIP Trust. A Lifetime QTIP Trust may be used for lifetime asset protection and tax planning purposes.