Tips For Setting Up a Supplemental Needs Trust
January 5th, 2014
If you have a family member with special needs, it’s important to factor him or her into your estate planning. In fact, there are “special needs trusts” or “supplemental needs trusts”, which can be created specifically for this purpose. Working with a special needs lawyer is often the best way to make sure that you’re setting your loved one up to be cared for when you’re no longer able to do so yourself.
Special needs trusts can be set up as either a revocable or irrevocable trust, as well as funded in numerous ways. You can also customize whether it springs to life upon your passing or is set up during your life. Much will depend on how the trust is going to be funded.
If you’re the only one to contribute then a trust that springs to life upon your death may be the best choice. However, if other family members, such as grandparents, aunts or uncles also plan to contribute then it makes the most sense to create the trust now. If you’re sure that the parents will be the only contributors, then you might want to consider a revocable trust, as it can be changed throughout your lifetime to reflect the choices you want to make over the course of time.
Like with any trust, one of the biggest considerations that needs to be made is who will be the trustee. This is the person who’ll administer the trust, which has been created to care for your loved one. Careful thought needs to go into choosing this person, as he or she will have a significant impact on the life of the person cared for by the trust. The trustee will also have access to funds and will be responsible for making a lot of important decisions with those funds.
Your special needs lawyer can help you define the role of this person through your legal documents, but you still want to choose someone who is trustworthy and has your loved one’s best interests at heart. He or she should also be very familiar with the specific needs of the person they’ll be responsible for, which could range from medical concerns to favorite foods and hobbies. Additionally, you want to choose someone who has the ability to create and execute a reasonable budget. One option is to name both a family member and a professional as co-trustees, but again, this is something your lawyer can help you sort out.
Of course, determining how much money needs to go into the trust is another major concern. There are so many factors to take into consideration. Remember that costs will likely continue to rise over time so basing totals on today’s costs will likely not be adequate. This is yet another reason that it makes sense to work with a special needs lawyer in your area. He or she will be familiar with many of the most common costs and how high they are where you live, but will also be able to personalize the trust so it’s a good fit for your particular situation.
You may find that there are some one-size-fits-all special needs trust planning tools online, but this is an area where that option really isn’t a good idea. No one has to tell the parent of a special needs child that every situation is considerably different. Instead, choose a qualified special needs lawyer in your town for the peace of mind knowing that your child will always be cared for and protected in your absence.