Trust Overview

A special needs trust is a legal arrangement created to benefit individuals with disabilities while preserving their eligibility for means-tested government benefits.

A special needs trust is a legal arrangement created to benefit individuals with disabilities while preserving their eligibility for means-tested government benefits. Special needs trusts are designed to supplement, not replace, the assistance provided by government programs such as Medicaid and Supplemental Security Income (SSI). Trust beneficiaries can use trust funds to cover various expenses related to their care and well-being. Special needs trusts offer:

Financial support for care expenses without jeopardizing public assistance benefits
Sustained care beyond a caregiver's lifetime
Asset allocation for the beneficiary's sole benefit
Supplemental assistance, complementing public benefits
Flexibility in utilizing funds for items that benefit the beneficiary's well-being
Trust management by dedicated trustees, ensuring tailored support

Pooled Trust

Managed by a non-profit organization
Provides access to professional trustees
Accepts accounts of any size
Funds are pooled for investment purposes, allowing for the opportunity of growth
Can be cost-effective for smaller asset amounts
Involves minimal cost and paperwork

Stand-Alone Trust Special Needs Trust

Established by a parent, grandparent, or the court
Managed by a single trustee who acts in the best interest of the beneficiary
Appropriate for larger asset amounts due to higher legal and financial fees

First-Party Trust

Established by individuals themselves to benefit their own needs
Utilizes personal assets, such as inheritances or settlements
Trust is managed by a trustee, catering to the beneficiary's requirements
Beneficiary's signature or authorized representative's involvement through Joinder Agreement
Parent, grandparent, court, or legal guardian can sign on behalf of the beneficiary
Power of attorney with relevant authority can also sign for the beneficiary

Third-Party Trust

Established by a person other than the beneficiary for the beneficiary's benefit
A grantor funds the trust with their own assets
Designates the beneficiary’s third-party established trust to receive the trust benefits
Provides ongoing financial support for loved ones, even after the grantor's passing
Can help avoid probate and minimize estate taxes