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What is a Special Needs Trust?

A special needs trust is also sometimes known as a supplemental needs trust. This is an important estate planning tool if you have a family member with a disability.

Why Consider a Special Needs Trust

Special needs trusts are important for three reasons. First, your disabled family member may be eligible for government benefits during his or her lifetime. The most common is supplemental security income (SSI), which is only available to people below a certain income and asset level. A special needs trust is an irrevocable trust that allows you to give them money or assets without threatening their eligibility for government programs.

A second reason is that your family member may have unique needs that a simple bequest will not address. You can design the trust so that the trust assets are managed according to those specific needs.

Third, you may be concerned about assets being reached by creditors or an ex-spouse. Particular if your family has mental disabilities, you may have concerns about his or her ability to exercise good judgment in all circumstances. A special needs trust can help protect those assets and make sure they remain intact for your family member's benefit.

Types of Special Needs Trusts

The most commonly used kind of special needs trust is a third party special needs trust. This is where you as the third party can put assets into the trust to be managed by the trustee. If set up properly, it will not count against their benefits. You can also specify what happens to the assets after the beneficiary passes.

An example would be a family with a special needs child and two other children. You can specify that assets in the trust go to your special needs child's children if there are any. You can also specify that the trust assets should distribute to your other two children after the beneficiary passes.

Another kind of special needs trust is a first party special needs trust. These are often established when a disabled person receives a large amount of money from an outside source.  This can be a settlement of a personal injury suit or an employment discrimination suit, or even lottery proceeds.

This kind of trust operates during his or her lifetime like the third party trust. The main difference is that the government may have a claim to the trust assets after the beneficiary's death if he or she was receiving government benefits.

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Funding a Special Needs Trust

A trust is simply a container to hold assets. This means you can put assets in it when you create the trust or any time after, including in your own will.

Most often the main concern for parents is making sure the child is taken care of after they pass. In this case you can create the trust and direct assets to it in your will. This gives you maximum flexibility with your own assets during your lifetime but still takes care of your child.

If your child has reached adulthood and is living independently or semi-independently, you might consider placing some assets into the trust right away. By establishing a special needs trust and activating the trust while you are alive, both your child and the trustee can get used to working with each other. This may give you some additional peace of mind in your own planning.

How We Can Help

Special Needs trust MA estate planning attorney
Jenna Ordway
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We are ready to help.  We have a simple process at our law firm for getting you from wherever you are now to executed and final documents.  It starts with an initial consultation, which is absolutely free.  You can use the button below to schedule your free information call, or simply give us a call at 781-784-2322.
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  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
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