Jennifer C. Rydberg, Attorney at Law
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What if I need to craft a special needs trust?

For Washington families with a disabled loved one, there are often concerns as to what might happen to that person if no one from the family is left to either care for them or to ensure they are getting the care they need. This is when it might be wise to consider a special needs trust. Because the government and other entities are not obligated to provide anything more than baseline care to a disabled person, the family can put funds in a trust to prepare for the future of a disabled person. Done correctly, this can also allow that person to get other benefits he or she is entitled to.

Knowing how much should be in the trust is key. There are various factors that go into this decision. If, for example, the disabled person needs substantial care, it is wise to put as much money as possible into the trust. It can vary. There is not a minimum amount to have a special needs trust, but due to the costs for setup and management, it is suggested that at least $100,000 be placed in the trust. There are multiple ways to fund a trust, such as life insurance policies, inheritances and other assets.

There are two basic kinds of special needs trusts. A first-party special needs trust can be crafted by adults who have accrued assets prior to becoming disabled or received assets after they have qualified for government programs like Supplemental Security Income. Generally, however, third-party trusts are used more often. These are created for the benefit of children. For people who do not have significant assets, they can take other steps such as an ABLE account. A pooled-asset trust is a charitable pool that will combine the assets of multiple beneficiaries.

For people who are worried about a loved one with special needs, trust planning is vital. Understanding the various aspects of a special needs trust and how the beneficiary will be cared for is an essential part of the process. A legal professional experienced in estate planning can help with determining the best alternative for a trust and in moving forward with the process.

Source: cnbc.com, "How to set up a special needs trust," Mark Hendricks, Oct. 25, 2017

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