A trust is a legal arrangement that allows one person (or business) to hold the legal title to property for another person referred to as the beneficiary. A trust, after created, is funded when property is transferred into it. This includes property such as real estate, financial accounts, and other tangible items. There are many benefits of a special needs trust in estate planning. A special needs trust is created for the sole benefit of a disabled or mentally ill beneficiary. A special needs trust beneficiary usually lacks the mental capacity to manage her own finances. Therefore, the trustor creates a special needs trust for the specific needs, lifestyle, and future well-being of the beneficiary. The special needs trust can last as long as it is needed.
Benefits of a Special Needs Trust
There are many benefits in creating a special needs trust. For example, a person may want to create a special needs trust to prevent the government from gaining control over or avoid losing eligibility for Supplemental Security Income (SSI) or Medicaid benefits. One of the benefits of a special needs trust is that SSI and Medicaid will ignore property in the special needs trust when considering program eligibility. Keep in mind, the trustee should not give money directly to the beneficiary. Doing so could interfere with SSI or Medicaid eligibility. In contrast, the trustee should spend trust assets to buy food, clothing, and medical expenses for the beneficiary in addition to paying the beneficiary’s rent or mortgage. Even if you are not concerned with government benefits for the beneficiary, you should still consider a special needs trust to address the beneficiary’s needs.
One of the other benefits of a special needs trust pertains to taxes. Funds used to create a special needs trust are tax-deductible. Creditors are also not allowed to file a lawsuit against a special needs trust for monies owed. Special needs trust funds are used for the beneficiary.
There are many benefits of a special needs trust so one might wonder why people are hesitate to create them. In the past, one of the disadvantages of a special needs trust has been the high cost to create one. Fortunately, you can hire A People’s Choice as an affordable alternative to working with an attorney. The majority of trusts, whether a revocable living trust, irrevocable trust, spendthrift trust or special needs trust, are created by using complex legal software. A People’s Choice uses the same software that many licensed California attorneys use. As a result, with our easy interview process and legal software, we can help you save thousands of dollars in preparing a special needs trust for your loved one. Contact us at 800-747-2780 today to find out how we can help you with your estate planning needs.
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