Special Needs Trusts
Annapolis, Maryland Special Needs Trust Attorney
Special needs trusts play an important role in estate planning for families with a special needs child or a disabled individual. These trusts provide a legally sound solution to safeguard the financial well-being and quality of life of loved ones with unique requirements. By establishing a special needs trust as part of your estate plan, you ensure that your assets are managed and disbursed in a way that won’t jeopardize vital government benefits and support systems. This planning not only grants peace of mind to caregivers, but also empowers disabled individuals or special needs children to maintain a higher quality of life, access essential services, and enjoy a secure financial future.
Of course, in any case, navigating the intricacies of estate planning can be a daunting task, but when you have a special needs child or a disabled family member, the importance of a carefully crafted estate plan cannot be overstated. At The Law Office of Raymond E. Brown, our Maryland special needs trust attorneys understand the emotional and legal challenges these families face, and we are here to guide you through the process of special needs planning.
Whether you are just beginning to explore your options or need to update an existing plan, the experience and dedication of Raymond E. Brown and his legal team ensures that your family’s unique circumstances are met with experienced legal counsel and a compassionate touch. To get in touch, give us a call at (443) 554-9944 today.
What is a Special Needs Trust?
A special needs trust is a legal arrangement designed to manage and protect the property and assets of a disabled person, such as a disabled child or an individual with a developmental disability or mental illness. Many parents and family members who want to ensure the financial well-being of their disabled loved one without jeopardizing their eligibility for crucial public benefits, like Medicaid, Supplemental Security Income (SSI), or housing assistance choose to utilize special needs trusts.
The key purpose of such a trust is to provide for a disabled person’s special needs or supplemental care. It allows funds to be set aside and managed on their behalf, ensuring that their quality of life and comfort are enhanced, even when their disability requires additional support or services.
A special needs trust is structured in a way that the assets within it do not count against the disabled person’s eligibility for means-tested government benefits, thereby safeguarding their access to essential assistance programs while still offering financial security and peace of mind to their family members.
Types of Special Needs Trusts
Special needs trusts come in two primary types: third-party trusts and self-settled trusts, each serving different circumstances and designed with the best interest of the disabled person in mind. Both types of trusts have their own specific rules and regulations and ultimately depends on the unique circumstances of the individual and the source of the funds.
Third-Party Special Needs Trust
Third-party special needs trusts are typically set up by parents, family members, or loved ones for the benefit of a disabled person. Funds placed in a third-party trust are assets contributed by someone other than the disabled individual, such as parents leaving an inheritance or family members making a financial gift. These types of trusts are ideal when family members want to ensure the financial security and well-being of the disabled person without affecting their eligibility for public benefits.
Self-Settled Special Needs Trust
On the other hand, self-settled special needs trusts are funded with assets that belong to the disabled person themselves, often through a personal injury settlement, inheritance, or other means. These trusts are established to protect such assets while also still allowing the disabled individual to qualify for public benefits. They are primarily used when a disabled person has assets in their name and needs to preserve them for their own long-term care and well-being.
Benefits of a Special Needs Trust
One of the most significant benefits of a special needs trust is that it allows individuals with disabilities to receive financial assistance without losing eligibility for certain government benefits, such as Medicaid or Supplemental Security Income (SSI), which can cover essential medical and living expenses. This allows families to allocate trust funds for supplementary services like respite care, therapy, or specialized treatments that significantly improve the quality of life for their disabled family member.
Another significant benefit of a special needs trust is that it can help ensure that a person with a disability is provided for after the death of a parent or caregiver. By setting up a special needs trust, parents or caregivers can provide for their loved one’s ongoing care and support even after they’re gone.
All in all, these trusts provide a reliable and structured way to safeguard assets, ensuring that they are available to meet the unique needs and challenges associated with certain disabilities. They offer both financial security and peace of mind, enabling many families to focus on what matters most: the well-being and best interests of their loved ones.
How It Works
Special needs trusts work by placing assets, such as inheritances, life insurance policies, or financial gifts, into a trust managed by a trustee, which is often a legal guardian, family member, or close friend. These assets are then used to provide for the beneficiary’s future care and well-being without jeopardizing their eligibility for essential government assistance.
The trustee ensures that the trust funds are used to cover supplemental expenses, such as medical treatments, therapies, education, or quality-of-life enhancements, while government benefits continue to cover primary living expenses. This way, special needs trusts help secure a disabled individual’s financial stability and access to necessary government support, providing peace of mind to both the beneficiary and their family.
Examples of Special Needs Trusts
For example, let’s say that John is a 25-year-old man with Down syndrome who receives SSI benefits to help him pay for his basic living expenses. John’s parents want to leave him an inheritance. Still, they’re concerned that if John inherits the money directly, he will lose his SSI benefits because his assets will exceed the eligibility threshold.
To avoid this, John’s parents created a special needs trust and named him the beneficiary. The trust is set up to hold the inheritance for John’s benefit, and a trustee is appointed to manage the assets in the trust on John’s behalf. Because the assets in the trust are not counted as John’s resources, he can continue to receive SSI benefits and use the trust funds to pay for additional expenses not covered by his government benefits.
Here’s another example: Mary is a 30-year-old woman with cerebral palsy. Mary’s parents set up a special needs trust and named her the beneficiary. The trust includes instructions for how the trust funds should be used to provide for Mary’s needs, such as paying for her housing, medical care, and other expenses, after her parents pass away.
Planning for a Special Needs Family Member
If you’re considering setting up a special needs trust for yourself or a loved one, working with an experienced Annapolis estate planning attorney who can guide you through the process and help you create a plan that meets your unique needs and goals is essential.
An estate planning attorney like Raymond E. Brown plays a crucial role in helping clients navigate the complexities of special needs planning, ensuring that the specific needs of their loved ones are met with care and consideration. He is well-versed in the complex legal and financial aspects of special needs planning, offering unparalleled guidance to families seeking to secure the future of a disabled individual or a special needs child. He takes pride in helping clients create and manage special needs trusts in Maryland, tailoring estate plans to accommodate the unique circumstances of their loved ones, and ensuring that assets are preserved and distributed in a manner that protects their eligibility for essential government benefits.
Call The Annapolis Estate Planning Attorneys at The Law Office of Raymond E. Brown Today
When it comes to securing the future of your loved ones and navigating the world of special needs estate planning, trust your legal situation to an experienced Maryland special needs planning attorneyat The Law Office of Raymond E. Brown. We are fully committed to preserving the well-being and financial security of individuals with disabilities, offering tailored solutions that cater to your specific needs and adhere to Maryland law.
Don’t hesitate to schedule a consultation with us today and discover how we can help you achieve peace of mind and a brighter future for your family. Give us a call at (443) 554-9944or reach out onlineto get started today.