Safeguarding Your Loved One’s Assets
A special needs trust makes it possible for family members to set aside money for a disabled family member. It’s a third-party trust, meaning it’s managed by an appointed trustee. The contributed assets are protected, earmarked for expenses associated with improving the life of the appointed beneficiary.
A special needs trust is good for more than saving funds for the care of a loved one. It plays an important role in safeguarding assets from unintended use without jeopardizing the beneficiary’s qualification status for disability benefits. It does a lot more, too. Let’s take a look at a few reasons why they’re helpful.
Earmark Assets for Specific Purposes
Any assets placed in a special needs trust can be used for one purpose only — to fund any purchases or services that improve the life of the disabled beneficiary. With the help of the appointed trustee, funds are only distributed for these approved purposes.
Many special needs trusts are used solely for non-countable purchases. These include caregiver services, a primary place of residence, furnishings for the home, funeral and burial expenses, and even expenses related to the occupation of the beneficiary.
Remain Eligible for Disability Benefits
In order for a disabled individual to qualify for Social Security income, Medicaid, subsidized housing and other benefits, the individual must fall within a certain income range. One of the benefits of a special needs trust is that the assets in it are not counted in the qualification process.
Additionally, as long as the disbursements paid out are used for the non-countable purchases mentioned above, they aren’t counted as income that would ultimately affect the individual’s qualification for their benefits.
Protect Assets from Creditors or Divorce
Assets placed in a trust are protected for use by the beneficiary only. Even if the disabled individual has debt in collections, the creditor cannot gain access to the assets. These assets are also protected in the event of a divorce.
Since there are a number of factors to consider when setting up a special needs trust, it’s best to enlist the help of an estate attorney. They can help provide the guidance you need to care for your loved one with special needs.
~Here’s to Your Financial Health!