One way to provide support for a person with special needs is by creating a special needs trust. Receiving funds from this kind of trust does not work against a person with special needs when applying for government benefits. This works by getting an exemption for the trust. Florida residents might like to know more about using a special needs trust.
A special needs trust could receive an exemption when the assets in the trust are used to help with a beneficiary’s supplemental needs and when the beneficiary cannot ask for distributions. This type of trust is irrevocable and must only have one lifetime beneficiary. Some of the things the trust can cover include costs for transportation, hobbies, supplementary education assistance and entertainment.
When leaving assets to a person with special needs, one may need to create a special needs trust. Otherwise, an inheritance could be counted as income, which could impact eligibility for government assistance.
Parents or other caregivers may have financial troubles when supporting themselves and a person with special needs. Programs offering public assistance might be needed like the Supplemental Nutrition Assistance Program. Individuals with special needs could gain help with things like food and childcare from these programs while still getting distributions from a trust.
While a special needs trust is irrevocable, revocable trusts can also be used for estate planning. Revocable trusts can be edited while a grantor is alive, which may be necessary if major life changes like divorce occur or if a grandchild is born. Trusts can be used to avoid the probate process. However, going to probate court may be necessary if a will is contested or is invalid. An attorney may be able to help ensure that estate planning documents are valid and comply with all state laws.