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ESTATE PLANNING
FOR SPECIAL NEEDS OR DISABLED INDIVIDUALS Families
with a child with Down's Syndrome, Muscular Dystrophy, or another
catastrophic illness that makes it difficult for him or her to handle money
should consider planning for their disabled child or children. If you have a child or loved one with a
disability or special-needs, the LAW OFFICES OF AFSHIN A. ASHER, INC. can
assist you in preparing a specialized plan to meet your unique needs. SPECIAL NEEDS TRUST A
Special Needs Trust is a special kind of trust which holds title to property
for the benefit of a child or adult who has a disability. The Special Needs
Trust can be used to provide for the needs of a disabled person to supplement
benefits received from various governmental assistance programs including SSI
and Medi-Cal. A trust can hold cash, personal property, or real property, or
can be the beneficiary of life insurance proceeds. "Special Needs"
Defined Special
needs refers to the requisites for maintaining the comfort and happiness of a
disabled person, when such requisites are not being provided by any public or
private agency. Special needs can include medical and dental expenses, annual
independent check-ups, equipment, programs of training, education, treatment,
and rehabilitation, eye glasses, transportation (including vehicle purchase),
maintenance, insurance (including payment of premiums of insurance on the
life of the beneficiary), and essential dietary needs. Special Needs Trusts
may also include spending money, electronic equipment such as radios, CD
players, television sets, and computer equipment, camping, vacations,
athletic contests, movies, trips, money to purchase appropriate gifts for
relatives and friends, payments for a companion, and other items to enhance
self-esteem. Common Questions About Special Needs Trusts Does the Social Security
Administration Allow Special Needs Trusts? In
1975 the Social Security Administration established rules allowing assets to
be held in trust for a recipient of SSI as long as the disabled beneficiary
cannot control the amount or the frequency of trust distributions and cannot
revoke the trust and use the trust assets for his or her personal benefit. The
Social Security Administration's handbook Understanding SSI states: "A trust can be set up for an SSI
beneficiary." Who can establish a
Special Needs Trust? Parents
(or other family members) of a disabled child can establish a Special Needs
Trust as part of their general estate plan. The parents can "pour-over"
that child's share of their estate into this special trust and not worry that
their child will be prevented from receiving benefits when they are not there
to care for the child. A
disabled person who expects an inheritance or other large sum of money may
establish a Special Needs Trust. Receipt of these funds might otherwise
disqualify them from public benefits. In many situations, a trust can also be
established after the disabled person has received an extraordinary amount of
money, though a court order may be necessary. Who will manage the trust
assets? The
manager of a trust is called a "trustee". It can be any person over
eighteen years of age, a bank, a financial planner, CPA , or a professional
fiduciary. The trustee holds, administers, and distributes all property
allocated to the trust for the benefit of the disabled person during their
lifetime. Who can serve as Trustee? In
most circumstances when a Special Needs Trust is established by parents for
the benefit of a disabled child, those parents serve as the trustee until
they die or become incapacitated. When that occurs a successor selected in
advance by the parents or person establishing the trust continues to serve
according to instructions contained in the trust. Can the disabled person serve as trustee? No.
The whole premise of a Special Needs Trust is that the disabled beneficiary
shall not be considered to have access to principal or income of the trust.
The assets of the trust are for the benefit of the disabled person. However,
the disabled person has no power or authority to direct the payment of funds. What is placed in the
trust to establish it? Any
kind of asset may be held by the trust. Holding title by the trust is a
simple process of putting the title to that asset in the trust's name. Many
times a trust has no assets put into it until the death of the settlor. The
Special Needs Trust in that case is an empty shell waiting for a future
event. It is prudent to place some assets into the trust and begin using the
trust immediately, but it is not required. Can Additions be made to
the Trust? Yes.
Additional property may be added to the Trust at any time by the Settlor, or
any other person. Additions may be made by gifts during life, by will or
living trust, by life insurance policies, employee plan benefits, or
retirement plan benefits. Are Special Needs Trusts
Confidential? Yes.
If the Settlor desires, the Trust can remain confidential to all persons. Can a Special Needs Trust be
used by recipients of settlements or personal injury awards? Yes.
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by LAW OFFICES OF AFSHIN A. ASHER. All rights reserved. Terms and conditions of use. This web site is
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