Setting up a trust can be an important part of an effective estate plan. There are different types of trusts for estate planners to be familiar with which can help based on their unique situation and circumstances. One type of trust is a special needs trust for estate planners to ensure they understand and know when to utilize.
A trust is created when property is transferred into trust to be managed by another party, referred to as the trustee, for the benefit of another party who is referred to as the beneficiary. The selection of a trustee is an important decision that should be made carefully. Special needs trust are created for the benefit of a beneficiary with a physical or mental disability, which may include those who lack the capacity to manage their one finances.
A special needs trust can be utilized to ensure the beneficiary does not lose their government benefits they may receive for a disability or another reason. It is important that a special needs trust is properly drafted and worded. It is also important that a special needs trust be property set up, as property must be transferred into the trust for the trust to be valid.
One example is that a special needs trust needs to state that it is intended to provide supplemental and extra care beyond what is provided by the government benefits. In addition, there are different types of trusts with different uses, purposes, rules and requirements.
Estate planning is important for any family and different estate planning tools and resources are available to help with the different needs of estate planners for their estate plan. As a result, estate planners should be familiar with the different estate planning tools, including special needs trusts, and how they can help them.