Types Of Special Needs Trusts

The past few years have made it abundantly clear that money and health are both scarce resources. You might think that you will never need a special needs trust, but this probably reflects a hubristic view of your own future or a narrow understanding of medical special needs and of trusts. Contrary to popular media stereotypes, trusts are not just for fabulously wealthy people, and special needs trusts are not just for people whose disabilities are so severe that they have never been and will never be in the workforce. It is possible to set up a special needs trust for a disabled family member who is employed or who is not currently employed but may find work in the future. You can even be the beneficiary of your own special needs trust. A special needs trust can ensure financial stability for the intended beneficiary during your lifetime and after you are gone, and it can make the probate of your estate easier for the personal representative. For help establishing a special needs trust or another kind of trust, contact an Orlando estate planning lawyer.

First Party Special Needs Trust

With a first party special needs trust, the grantor and the beneficiary are the same person. In other words, you are establishing the trust to provide for your own long-term care and other expenses in the event that you become disabled. It is a good idea to set up a trust like this if you are currently gainfully employed, but you have been diagnosed with a chronic illness that will eventually lead to disability. Florida law requires the grantors of first party special needs trusts to include a provision where, if there is money left in the trust when the beneficiary dies, the trust will reimburse Medicaid for the amount that Medicaid spent on the beneficiary during his or her lifetime, or as close to that amount as the money left in the trust allows.

Third Party Special Needs Trust

With a third-party special needs trust, the grantor is a parent or other family member of the beneficiary; this is the most common type of special needs trust. Because the trust assets legally belong to the trust instead of to the beneficiary, the financial support that the beneficiary derives from the trust does not jeopardize the beneficiary’s eligibility for Medicaid and other public benefits. Unlike with a first party trust, a third-party trust does not need to reimburse Medicaid after the beneficiary’s death.

Pooled Trusts

If you need to support multiple beneficiaries, a pool trust is your best choice of special needs trust. There are nonprofit organizations dedicated to acting as trustees of pooled trusts established for the benefit of people with disabilities.

Contact Gierach and Gierach About Trusts for Beneficiaries With Disabilities

An estate planning lawyer can help you establish a special needs trust to provide for your own care of that of your family members.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.

Source:

msn.com/en-us/money/other/four-reasons-you-don-t-need-a-revocable-trust/ar-AA1gHQU6?ocid=msedgntp&pc=ACTS&cvid=397d97c93a0a494eb773623ab853cc93&ei=38