Atlanta Special Needs Lawyer on “What is a Special Needs Trust”
By: Steve Worrall, Atlanta special needs attorney
Being an Atlanta special needs attorney, I’m quite often asked the question, “Just what is a Special Needs Trust?"
For starters, a special needs trust is legal entity put in place to maintain money and property belonging to someone who has a mental or physical impairment. The trust identifies a trustee whose job it is to handle the assets and distribute them in accordance with the provisions of the trust. There can be precise rules in how property may be spent in order that they do not disqualify the named beneficiary from eligibility for government programs.
There are two main types of special needs trusts. These are:
Self Settled Special Needs Trusts In a self settled special needs trust the properties and assets in the trust are owned by the named beneficiary. For instance, if the person becomes disabled as a result of negligence of a health care professional or motor vehicle accident, it may be possible that the beneficiary received money as a result of going to court. In this case, a self settled special needs trust is created for the named beneficiary to receive and retain the settlement money so that they can continue to keep federal government benefits.
Third Party Special Needs Trusts A third party special needs trust or supplemental needs trust is established by a third party with funds that are owned by the third party. As an example, the parents of a child born with Down syndrome or autism can establish a special needs trust for their child as an element of their comprehenisve estate plan. In your situation of a third party special needs trust, family members can make lifetime gifts to the child.
Distributions for Special Needs Trusts To be able to contniue to receive government benefits it is important to instruct the trustee not to spend on services that happen to be supplied by a government agency. If performed correctly, the equity in the special needs trust will not be counted as a resource. The trust needs to allow distributions only for special or supplemental needs. Certain instances of this might include things like dental care, specialized therapy, and services of a care giver. Improper distributions of a special needs trust can cause a loss of government benefits, so it is important that the trust be established and then managed in the right way.
Who Should Set up a Special Needs Trust? Not all Atlanta Georgia special needs trust lawyers have the training, skills or information to draft a special needs trust. You really should seek advice from an attorney who has experience in planning these trusts and who knows how to correctly advise trustees.