What is a Special Needs Trust in Texas?
Too often, estate planning seems like a task that can wait for the future. Unfortunately, there are some reasons that procrastination is a bad idea. If you are the parent of a disabled child, you should be especially concerned. In fact, you need to know the value of setting up a Special Needs Trust.
For some, writing a will is an assurance of passing on a legacy or leaving instructions for guardianship of minor children. However, parents with adult children with special needs have other worries. First, they may want to ensure that there is a trusting person to help their disabled dependent. Next, there is the issue of financial funding for the future. If this situation applies to you, you undoubtedly fear what the future holds after you pass. A Special Needs Trust can help alleviate your concerns.
How is a Special Needs Trust set up? Frankly, this is not an undertaking to consider without the counsel of an experienced trusts and estates attorney. More than likely, your disabled child is entitled to some form of public assistance. This could include Supplemental Security Income (SSI) or Medicaid benefits. Without proper counsel, you might inadvertently jeopardize your child’s future eligibility to either or both programs.
Special Needs Trusts for the Disabled
Special Needs Trusts are not only set up by parents for their children. If you have a disabled brother or sister, you may find it essential to establish financial funding for them. Typically, Special Needs Trusts are created for individuals who have limited medical or physical capacities and are unable to provide for themselves.
When a Special Needs Trust is designed, it is intended to make financial provisions not available by public assistance. For example, the funds may be aimed at ensuring a special vehicle can be purchased for transporting a handicapped individual. Meanwhile, the goal is for the money deposited in the trust to not count towards the restriction requirements of public assistance.
When it comes to funding Special Needs Trusts, life insurance policies are a consideration. Your attorney can work with you and your insurance agent to determine the best type of policy for your situation. When you meet with your lawyer, you should discuss the benefits and disadvantages of each of these types of life insurance policies:
- Whole Life Insurance Policy
- Term Life Insurance Policy
- Universal Life Insurance Policy
- Variable Life Insurance Policy
- Survivorship Life Insurance Policy
In addition to setting up a Special Needs Trust, there are other issues you should discuss as part of your estate planning tools. Of course, you should engage in discussions concerning the passing of your estate. Learn the differences between a Will and setting up a Trust. Meanwhile, you should determine who should be charged with maintaining the Special Needs Trust, as well as guardianship.
If you have concerns about establishing a Special Needs Trust for a disabled dependent, the Law Offices of Manfred Sternberg and Associates can assist you. We would be honored to meet with you and offer you experienced and compassionate legal counsel. Contact us to schedule an appointment.