Some Florida families may worry about establishing financial security for a loved one that is physically disabled or is mentally incapable of managing personal financial matters. Additionally, you may worry that establishing a trust can interfere with government benefits your disabled loved one may otherwise receive. This is where a special needs trust comes in.
According to FindLaw, special needs trusts are crafted with the intention of providing for people that are mentally impaired or physically disabled. These trusts are adapted for the lifestyle, needs and future of a special needs person. A family member can be named as a trustee. However, if a family member is not available, or if there are no members of the family that are deemed trustworthy, a court can appoint a third party to oversee the trust. Trustee selection is especially important if the special needs person is young.
A special needs trust can fulfill a number of specific functions. If a disabled individual is awarded proceeds by a court as a result of a legal case, a special needs trust can be set up on the individual’s behalf. In the event the trust beneficiary is ever sued, the assets in the trust will not be subjected to a judgment. Also, a special needs trust can be used to convey inheritance assets to a disabled beneficiary.
Furthermore, you may want to set up a special needs trust to make sure a disabled loved one is not denied government benefits such as Medicaid, subsidized housing or SSI. While a will can distribute money to a disabled person, suddenly gaining assets like lump sums can actually disqualify a person for certain forms of government assistance. However, the government will not count assets contained in a special needs trust against a person’s benefit eligibility, since the intended beneficiary is not in control over it.
This article is intended to educate the reader on the topic of special needs trusts and should not be taken as legal advice.