Special Needs Estate Planning
Austin Texas Estate Planning
Special Needs Estate Planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs must make careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children – both now and in the future.
Special people need special planning. Many families struggle with the best way to provide for a child or other loved one who, due to a physical or mental challenge, will never be in a position to effectively manage an inheritance. In addition, without proper planning, certain government benefits and supplements may be unavailable or much more difficult to obtain.
At Texas Trust Law we give extra special attention to families that are struggling with these issues. A properly crafted estate plan which incorporates Special Needs Planning can provide a lifetime of assistance for the special person and ensure that all of the benefits provided by outside sources are fully accessible. Our clients enjoy a substantially heightened sense of peace of mind after this planning is put into place.
An Overview of Special Needs Estate Planning
There are several types of trusts to assist with these special planning challenges. The most common types are Support Trusts and Special Needs Trusts.
Support Trusts: Support Trusts require the Trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of Support Trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child will require SSI or Medicaid, you should avoid a Support Trust.
Special Needs Trusts: For many parents, a Special Needs Trust is the most effective way to help their child with a disability. A Special Needs Trust manages resources while also maintaining the child’s eligibility for public assistance benefits.
There are two types of Special Needs Trusts:
Third-Party Special Needs Trust: Created using the assets of the parent(s) as part of an estate plan; distributed by a Will or Living Trust.
Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.
Special Needs Trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.