Special Needs Trusts: A Comprehensive Guide for Families
Planning for the future of a loved one with special needs is a journey filled with unique challenges and considerations. One of the most essential tools available to families in this situation is a Special Needs Trust. In this article, we will dive into what a Special Needs Trust is and how it can benefit your family.
What is a Special Needs Trust?
A Special Needs Trust is a legal arrangement that holds and protects assets for an individual with disabilities without impacting their eligibility for government benefits like Supplemental Security Income (SSI) or Medicaid. These trusts come in three primary forms:
Third-Party Special Needs Trust: Funded by someone other than the person with disabilities, such as a parent setting it up for their child.
First-Party Special Needs Trust: Funded by the individual’s own assets, which might include savings, an inheritance, or legal settlements.
Pooled Trust: Managed by a nonprofit organization, this type of trust combines funds from multiple families, providing a cost-effective solution.
Do You Need a Lawyer to Set Up a Special Needs Trust?
Setting up a Special Needs Trust can be a complex process, so it’s highly recommended to work with a special needs attorney. A professional can help ensure the legal document is accurate and prevent costly errors that could impact your loved one's financial future.
Choosing a Trustee and Guardian
One of the most important decisions you’ll make involves selecting a trustee to manage the trust and a guardian for your child. The trustee can be a family member, a trusted friend, or a professional. Look for someone who is organized, reliable, and genuinely prioritizes your child's needs.
The guardian will be responsible for your child’s care if something happens to you. It’s crucial to choose someone who understands your child’s unique needs and can provide the support they require. Regularly review these roles to adapt to any changes in your family’s situation.
The Importance of a Letter of Intent
While a Letter of Intent isn’t a legally binding document, it serves as a valuable guide for your child's future care. This document should include detailed instructions about their daily routines, medical needs, favorite activities, and other specific information. It’s essentially a roadmap for the trustee and guardian to follow to ensure your child’s well-being.
Considering an ABLE Account
An ABLE (Achieving a Better Life Experience) account is another valuable option for individuals with disabilities. It allows them to save money without affecting their eligibility for government benefits. ABLE accounts grow tax-free and can be used for various disability-related expenses, including housing, transportation, and education.
What Is a ChSNC® Designation?
The ChSNC® signifies expertise in financial planning for special needs individuals, their families, and caregivers. The program equips advisors with the specialized skill and advanced knowledge to champion for special needs individuals with honesty, ethics, and compassion ensuring your loved ones are well cared for and their financial strategies align with your goals.
Plan for the Future with Confidence
Special needs planning can seem overwhelming, but you don’t have to navigate it alone. At Falcon Wealth Planning, we’re here to help you secure a brighter future for your loved ones. If you have questions or would like to discuss your family's needs, please reach out to us and book your free assessment.
Additional Resources for Families
Here are two excellent resources for families with special needs:
Hire Heroes USA: Provides support to U.S. servicemen, women, and their spouses in finding meaningful careers. Learn more at Hire Heroes USA.
ABLE: Savings and investment accounts specifically designed for individuals with disabilities, offering tax advantages. Learn more at ABLE National Resource Center
*The content in this blog is for general informational purposes only and does not constitute personalized financial, investment, tax, or legal advice. Falcon Wealth Planning, Inc., a fee-only, true fiduciary, registered investment advisor, provides this information to give a broad understanding of financial concepts and strategies.
