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A special needs trust helps a special person in your life

Let us say that, as a teenager, your younger brother Tom suffered serious injuries in a car crash and as a result, became permanently disabled. Tom lives with you and your family, and you all see to his care and comfort.

However, you worry about what would happen to Tom if you should die suddenly, and you decide to speak with your attorney about a special needs trust.

The three-party relationship

A trust is a legal instrument that sets forth a relationship between the donor, who funds the trust, and the trustee who administers the funds for the sake of the beneficiary for whom the trust is created. The intention of a special needs trust is to manage assets for someone like Tom, who has a disability due to his spinal injury, or for someone who is physically or mentally impaired in some other way.

Three types of trusts

There are three types of special needs trusts:

  • First-party, in which the trust assets belong to the individual with special needs, such as a settlement from a motor vehicle accident
  • Third-party, where the trust funds belong to other people, usually relatives, who wish to help the person with special needs
  • Pooled trusts, usually established and run by charities, in which the resources come from many beneficiaries

Government regulations are behind the need for different kinds of trusts. The SSI or Supplemental Security Income government program offers financial assistance for people who have special needs. However, in order to qualify, a special needs individual must place his assets in trust: He can keep no more than $2,000 in his own name at any one time.

A plan for the future

When you discuss the development of your estate plan with your attorney, your focus will be on taking care of loved ones after you are gone. Creating a special needs trust is one way to ensure that a very special person in your life will receive the care he needs, even if he outlives you for decades.

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ANDERSEN PLLC
17015 N. Scottsdale Road, Suite 225
Scottsdale, AZ 85255

Phone: 480-900-3539
Fax: 480-265-9101
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