Using Supplemental Needs Trusts in Your Estate Planning

USING SPECIAL NEEDS TRUSTS

(OR SUPPLEMENTAL NEEDS TRUSTS) IN YOUR PLANNING

Estate Planning and Trusts Lawyer

A Special Needs Trust, or Supplemental Needs Trust as it is commonly referred to, is a special kind of Trust which allows a person who is eligible for public benefit programs to receive such benefits while also receiving a supplemental income stream for non-necessity items (such as beauty salon visits, vacations, gifts for children and grandchildren, etc.).

The public benefits recipient will always receive the benefits of the Supplemental Needs Trust for their lifetime as they always remain the Trust Beneficiary. However, they are able to receive the assistance of public benefits regardless of the funds placed in Trust for their Supplemental Needs over their lifetime.

The Trustee of the Special Needs Trust can be a family member well-versed in such Trust nuances, or the Trustee can be a trained fiduciary (such as a law firm and/or Attorney). The advantage of having a trained fiduciary to act as Trustee is that such a person knows which activities fall within the guidelines allowable for the Supplemental Needs Trusts, and which activities do not. Therefore, there is little room for mistakes or disqualification of the Special Needs Trust (which can have devastating effects). If you are adamant on being the Trustee of the Supplemental Needs Trust, you can always retain a law firm to receive guidance as to how to properly act.

A Special Needs Trust can be funded by a family member, or it can be funded by a Trust Beneficiary (if they have the capacity to do so). A Supplemental Needs Trust funded by a family member is referred to as a Third Party Supplemental Needs Trust, and a Special Needs Trust that is funded by a Trust Beneficiary is referred to as a Self-Settled Special Needs Trust.

Finally, in Florida, a Supplemental Needs Trust can be included in a healthier spouse’s Last Will and/or Trust in the event they predecease their ill spouses. You can also plan for the creation of a Special Needs Trust upon your death in your Last Will and Testament or Revocable Trust Agreement.

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