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What is a Special Needs Trust and Why is it Important?

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By Fate Kersey
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What is a special needs trust and why is it important

The purpose of a special needs trust is to provide funds to help your special-needs loved one. Although most trusts are set up using insurance proceeds or a portion of the parents’ estate, you can also set one up with no funds. In either case, it will pay for the special child’s medical expenses not covered by SSI or Medicaid. The ultimate beneficiary should not be the person who set up the trust. The trust may affect your loved one’s eligibility for Medicaid or SSI.

A special needs trust is also used to protect the child’s eligibility for government programs. Medicaid and Supplemental Security Income, for example, limit the value of a beneficiary’s assets to $2,000, so transferring assets into a special needs trust allows them to reach this amount without exceeding the asset threshold. There are two types of special needs trusts: group trusts and individual trusts. The goal of both types of trusts is to help disabled people manage their finances.

A special needs trust can be used for many purposes, including providing funds for non-covered medical expenses, education and special classes, and travel, as well as entertainment and other experiences. The possibilities are endless. With this type of trust, your loved one can benefit from the money you have set aside for them for their future. There is also some room for guesswork, but the money is well worth it.

A special needs trust can supplement SSI and other public benefit programs by covering additional expenses, including caretakers, therapy, and other amenities. However, it should not be used to pay for basic living expenses, such as food and shelter. Special needs trusts are not meant to provide cash payments or monthly allowances, but to provide the beneficiary with a quality of life. They can also be used for medical and counseling costs, or even modifications to the home.

Whether the special needs trust is set up through a will or a life insurance policy, it is important to understand the benefits of each type. While the trust can provide financial assistance for an individual with special needs, a self-settled trust can help protect public benefits. If you have the means, a special needs trust may be the best option for your loved one. If you have any assets to leave to a special needs individual, this will ensure that all of the money ends up in the hands of a person with a disability, and will protect them from Medicaid.

Special needs trusts can greatly enhance the quality of life for a person with disabilities. They help preserve the disabled individual’s eligibility for government benefits such as food, shelter, and medical care. The government will continue to pay for these benefits even after you pass away, and a special needs trust is an excellent way to ensure that he or she can receive them without any financial burden. It is important to make sure that a qualified attorney is hired to establish the trust.

Why is it important to set up a special needs trust? Because a special needs trust can protect a beneficiary from creditors, it is important for the person with a disability to receive financial support from family members. By creating a trust, you can preserve his or her eligibility for government benefits without jeopardizing his or her government benefits. This trust can also help protect your beneficiary from creditors if you die or pass away.

A special needs trust is a legal arrangement between a person and a trustee that allows the beneficiary to benefit from public assistance while receiving private funds. The funds in a special needs trust can also serve as a supplemental source of funds for the beneficiary. This allows them to continue receiving government benefits, without affecting their eligibility for SSI or Medicaid. This trust can also provide funds for medical expenses and other necessities not covered by public benefits.

A special needs trust can also be a third party trust. This type of trust is funded by someone other than the beneficiary. Funds from third parties are not counted toward state-set limits, and Medicaid does not have the power to recover any third-party funds. There are different types of trusts, but both of them can be beneficial for the person with special needs. A qualified financial advisor can help you determine which one would be best for your loved one’s needs.

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