Law Office of Harvey L. Cox provides asset protection services from our offices in Waco and Round Rock, Texas.

Law Office of Harvey L. Cox provides asset protection services.

What is a special-needs trust and what are their benefits?

On Behalf of | Jul 3, 2023 | Firm News

When creating your estate plan, you want to ensure you cross all your t’s and dot your i’s. If you have a special-needs loved one, it is important to ensure they will continue to have financial security and necessary care after you pass away. Special-needs trusts are valuable tools that provide support and protection for individuals with special needs.

By understanding these trusts, you can make informed decisions to safeguard the financial well-being of your loved ones with disabilities.

Creating financial security

A special-needs trust is a legal arrangement that allows individuals with disabilities to receive financial support without jeopardizing their eligibility for government benefits. These trusts specifically supplement, rather than replace, public assistance programs like Supplemental Security Income and Medicaid. By establishing a special-needs trust, you can enhance the quality of life for your loved one with special needs while ensuring their continued eligibility for vital government support.

Preserving Eligibility for Government Benefits

One primary advantage of a special-needs trust is its ability to maintain the beneficiary’s eligibility for need-based government benefits. Since these programs consider income and assets, directly inheriting or receiving a substantial sum of money could disqualify individuals with disabilities from receiving critical assistance. However, through a special-needs trust, a trustee holds the funds on behalf of the beneficiary, ensuring they do not exceed the eligibility thresholds and allowing them to continue receiving necessary government support.

Flexibility and customization

Special-needs trusts offer considerable flexibility and customization options. The trust document can outline specific instructions regarding fund disbursement, ensuring they supplement the beneficiary’s unique needs. This may include costs related to medical care, therapy, assistive devices, education, transportation, housing and other expenses that enhance the beneficiary’s well-being. You can tailor special-needs trusts to meet the individual requirements of each beneficiary, providing a personalized approach to financial support.

By understanding the nature and benefits of special-needs trusts, you can navigate the complexities of estate planning and create a robust financial plan for your loved ones with special needs.