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What should you consider when creating a special needs trust?

On Behalf of | Apr 3, 2024 | Estate Planning |

Estate planning is a great way of helping to ensure that your loved ones are provided for and your assets are distributed according to your wishes after you pass away. This includes those with special needs, whose care and financial security can be safeguarded through mechanisms such as a special needs trust.

A special needs trust should be carefully crafted to address the unique requirements of the beneficiary, ensuring that their financial security is maintained while preserving eligibility for government benefits and providing flexibility to adapt to changing circumstances over time. Mulling over the following considerations can be helpful when creating a special needs trust.

Choice of trustee

The choice of trustee for the special needs trust needs to be made with careful consideration. The trustee plays a crucial role in managing the trust assets and making decisions that directly impact the beneficiary’s well-being. It’s essential to select someone trustworthy, responsible and capable of understanding and meeting the beneficiary’s needs.

The trust funding

Deciding how much to fund the trust with requires careful consideration of the beneficiary’s current and future needs as well as an assessment of available resources and potential sources of income. It’s important to strike a balance between adequately providing for the beneficiary’s needs while also ensuring that their eligibility for government benefits is not jeopardized. Additionally, the funding strategy should take into account factors such as inflation, investment growth and the potential need for supplemental income in the future.

Trustee directions

The specificity of the directions provided to the trustee can vary depending on the unique circumstances of the beneficiary and the goals of the trust. These directions may include guidelines for how trust funds should be used to meet the beneficiary’s needs, instructions on managing investments and protocols for communicating with other family members or caregivers involved in the beneficiary’s care.

As these are just a few of the considerations that you’ll need to ponder as you move forward, know that seeking legal guidance can be helpful in ensuring that a special needs trust meets all expectations and is legally sound.