Long Beach Special Needs Planning Lawyers Helping Clients to Protect the Future of a Loved One With Special Needs

Planning for a lifetime of care for a loved one who is unable to fully support themselves because of a disability or special needs can feel like an overwhelming task. It may be hard to know where to even begin. Our attorneys provide a few informative insights about key aspects of special needs planning and explain why you may want to seek the help of a special needs planning attorney sooner than later.

What Are the Most Important Things to Consider When Planning for the Future of a Loved One With Special Needs?

When planning for the future of a relative or child with special needs, many families tend to prioritize items such as planning for medical expenses and caretaking. However, it is also important not to overlook another aspect: preserving your loved one’s eligibility to receive government benefits.

Families may often find that there is a delicate balance between making sure their loved one lives a comfortable life and keeping them eligible for benefits such as SSI (Supplemental Security Income). For that reason, many families turn to SNTs (Special Needs Trusts) as a way to achieve both goals.

How Can a Person With a Disability Benefit From a Special Needs Trust?

A Special Needs Trust can benefit a physically or mentally disabled person in many ways. First, it allows the beneficiary to use assets including funds and real estate, and those assets are not counted against the eligibility threshold for SSI and other government benefits. SSI checks are meant to provide coverage for basic needs such as housing and food, but a disabled person may require more than just basics to live comfortably. Assets in a Special Needs Trust may be used to cover bills and necessities that fall outside of the “basic needs” category but are still important for your loved one.

Another advantage of an SNT is that because legal title to the SNT funds rests in a third party, it can make financial transactions including bill payments directly without requiring the beneficiary to withdraw funds to his or her own bank account (which would be a taxable transaction). It is also worth mentioning that an SNT offers protection from creditors in addition to giving the trust creator the control to determine who will inherit the remaining assets in the trust after the primary beneficiary dies.

What Are the Most Common Types of SNTs?

Among the most common types of special needs trusts are First-Party trusts and Third-Party trusts. Special needs trusts are usually irrevocable, meaning they cannot be easily changed or terminated, and any assets used to fund the trust will be owned by the trust (and not by the person who transferred them into the trust).

The key difference between a First Party SNT and a Third-Party SNT is where the assets come from. A First-Party SNT is funded by the assets of the disabled person who will also be the beneficiary of the trust. This can happen when a disabled person won a personal injury lawsuit settlement after their injury, for example, and placed the assets in the trust in order to continue receiving SSI checks. A Third-Party SNT is funded by assets from others - a parent, a sibling, any relative, and even friends, and has the disabled person as the beneficiary. Both can have advantages and disadvantages, so discuss with your attorney which type of SNT may work best for your family.

How Can an Attorney Help Me?

As one can see, planning for the future of a loved one with special needs is no easy task. There are many different things to consider, and it may feel overwhelming at times. An attorney can help you through every step of the process, guiding you in the right directions, asking the right questions, and even helping you avoid costly yet common mistakes. At Barilari & Williams, LLP, our legal team has assisted many families in Long Beach and surrounding areas with all their special needs planning matters, and we are ready to assist you. Contact us at 888-EST-PLAN.