Trusts For Your Elderly Special Needs Loved One
Trusts December 28th, 2008(Trusts Video part 1)
However, assets from a trust can be used to provide for the well being of your loved one without disqualifying them from receiving governmental benefits.
The first step in setting up a trust for your loved one is choosing a trustee. This may be the most difficult issue for a grantor to decide on, and therefore all options should be discussed thoroughly with an attorney.
Most people naturally look to family members when choosing a trustee. However, the individual responsible for a special needs trust has the additional responsibility of planning distributions so that the beneficiary does not lose eligibility for public benefits. Family members may or may not have the necessary skill, time and selflessness to serve as trustee. Therefore, depending on the individual situation, consideration of a professional trustee may be appropriate.
Working through the types of trusts available for your loved one.
In many discussions of trusts, the terms ’special needs’ and ’supplemental needs’ are used interchangeably. However, New York state law distinguishes between the two, with a special needs trust being a trust set up for a disabled person with their own assets, and a supplemental needs trust being set up by a third party such as a parent or other family member.
Beyond this distinction, supplemental needs trusts can be divided into three categories.
Third party supplemental needs trusts.
Third party trusts can be established for a person of any age by a parent, family member or friend. This type of trust is a "discretionary" trust established for the benefit of a person with special needs whose disability establishes a long-term need for care. Since it is discretionary, the trustee must be careful how the money from the trust is spent. Upon the beneficiary’s death, any remaining assets will be distributed according to the trust agreement. The government will not have the right to recover anything from the trust.
First party supplemental needs trusts.
This type of trust is also known as a ‘pay-back’ trust, because upon the beneficiary’s death, the remaining funds in the trust can be used by the state to pay back any Medicaid benefits accrued during their lifetime. A disabled person under the age of 65 can establish a first party trust, and they may their own funds without jeopardizing eligibility for benefit programs.
Pooled trusts created by a non-profit association.
Pooled trusts pool the resources of many beneficiaries. A non-profit association then manages the resources. Pooled trusts are significant because they may be established for people of any age. Also, a pooled trust may be established not only by a parent, grandparent, guardian or court, but also by the special needs individual.
The choice of trust, trustee and manner in which funds from a trust should be distributed is complicated, but working through the issues with an attorney will guarantee your loved one will be well cared for.
By: Bernard Krooks
Article Directory: http://www.articledashboard.com Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit www.littmankrooks.com.
(Trusts Video part 2)
Unfortunately, most people think that once assets are placed in a Trust they are protected forever! However, this is simply not the case. If a Trust is found to be a sham, then asset
Sham Trusts Explained Rich Guide
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