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How a special needs trust may ease some financial burdens

Florida families with members having special needs are almost always under financial strain. This burden can be especially heavy as the older members of the family, usually the parents, begin to age. Parents of special needs children often worry about providing financial support for their special needs child after they are no longer able to do so. One potential answer for many families with special needs members is a special needs trust.

A special needs trust can be set up for almost any person with special needs. Such a trust can specifically address a disability, such as blindness or paralysis, and can be funded from a variety of sources. The person for whose benefit the trust is created is the “beneficiary,” and the person or entity charged with managing the trust assets is the “trustee.” A special needs trust can be established by an immediate family member, such as a parent or sibling, or by any person with an interest in the handicapped person’s welfare. Careful thought should be given to the choice of a trustee because that person or entity will play a crucial role in the management of the trust and the disbursement of trust assets.

Using a will to pass assets to a family member with special needs can be a mistake, because receipt of such assets may render the recipient ineligible for essential government programs such as Social Security Disability Insurance benefits. If assets are passed instead through the trust, they are not counted by the Social Security Administration and do not affect the beneficiary’s eligibility for SSDI benefits or Supplemental Security Income.

While the internet can provide access to many journeyman special needs trust forms, the advice of a capable estate planning attorney should not be neglected. A knowledgeable attorney can ensure that all the necessary terms are included and that the trust document will contain necessary clauses to ensure compliance with the Social Security Act, the Medicaid statute and any applicable state laws.

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