A special needs trust needs to be created if you are going to transfer money or property to a person who has a serious disability. Whether you’re giving an inter vivos gift (gift during your life) or making a gift in your will, you want to use a special needs trust to make sure the money is wisely managed for the person with the disability and to make certain that you do not cause a loss of benefits as a result of your gift.
You should work with an Ohio special needs planning lawyer to create a special needs trust. Your attorney can assist you in following the necessary formal steps for trust creation so your trust is legally valid and provides the desired protection.
Your attorney can also help you to understand what a special needs trust can be used for so you can provide appropriate instructions and make certain that the trust enriches the quality of life of the person who you care about who is disabled.
Give us a call to find out more about how an experienced special needs planning lawyer at Zimmer Law Firm can assist you with all legal matters related to special needs trusts.
Why is it Important to Make a Special Needs Trust?
You should create a special needs trust and transfer assets into it if you want to give those assets as a gift during your life or after your death to a person with a disabling condition. There are two primary purposes to special needs trust creation.
One is to allow you to select a trustee who will have a fiduciary duty to manage the money and use it to benefit the person with the disability. The disabled individual may not be able to manage money on his or her own, which is why this is so important. The other is to ensure the gift of assets does not cause a loss of access to Medicaid or other means-tested government benefits that disqualify people with too many resources.
When you name a trustee and beneficiaries as you create a special needs trust, you can also specify what is to be done with the money in the trust. The trustee has an obligation to both follow your instructions and to use the money and assets in a special needs trust for the purposes of benefitting the disabled individual.
What is the Money in a Special Needs Trust Used For?
The money in a special needs trust is supposed to be used to make life better for a person who has a serious disability. This kind of trust is also called a supplemental needs trust because it is supposed to supplement the income and resources provided to a person with a disability through government benefits.
A special needs trust is subject to strict rules to ensure no loss of access to benefits occurs. Money and property in a trust cannot be used to provide cash, or cash equivalents, to someone who is disabled. This means trustees should not just send checks or even provide gift cards to a person with a disability. Instead, the money in the trust should be used to buy things or provide experiences for the disabled person which might otherwise be unavailable.
Money and property in a special needs trust also cannot be used to do things like pay the rent of someone who is disabled. This is considered an in kind contribution that is essentially the same as giving cash, since the cash which would have otherwise paid rent is freed up. Instead, the trust should be used according to the trust creator’s instructions to offer something above-and-beyond the basics to enhance quality of life.
Getting Help from A Special Needs Planning Lawyer Today
Zimmer Law Firm provides assistance to clients in determining if they need a special needs trust and in deciding whether a first party or third party special needs trust is the right kind of trust. We also assist with trust creation, and with the process of making certain that a special needs trust you create is legally valid so it can provide essential protections.
To discover more about what a special needs trust can do or why you may want one, download our estate planning checklist. You can also give us a call at 513.721.1513 to talk with an Ohio special needs planning lawyer about taking steps to make a beneficial financial gift to a person who is disabled without putting any important benefits at risk. Call today to get the right legal advice before you make a mistake that turns a well-meaning gift into a big problem for a person in your life who is disabled.