When trying to prepare financially for the future, parents with children with special needs face specific and sometimes disturbing challenges. Through the Social Security Administration, which helps to pay for medications and essential special needs services, these parents most frequently rely heavily on supplemental security income (SSI) benefits.
When preparing for the financial future of the child, the challenge faced is that a direct inheritance to a child would most likely disqualify them for public assistance, and the child is therefore most likely unable to provide for itself. In order to maintain the child’s right to receive SSI benefits and other public assistance, parents frequently face the very real possibility of having to disinherit a child. Have a look at Special Needs Trust Attorney Logan for more info on this.
The main purpose of a successful financial plan for a child with special needs is to provide funds for living without restricting the child’s access to the benefits available. A Special Needs Trust helps parents achieve this purpose.
The formation of the Special Needs Trust emerged out of the need for a vehicle that would allow parents to deal with different government restrictions on how benefits are disbursed. Generally, this planning device is focused primarily on guidelines from the Social Security Administration that allow payment for such services without adversely impacting SSI benefits or eligibility status. The Special Needs Trust must be carefully organised as a fund that supplements, without superseding, SSI arrangements for the child’s needs in areas such as shelter, food and clothing in order to fulfil its purpose of maintaining the eligibility of public assistance.
A Special Needs Trust includes four basic elements, as with other trusts: (1) a corpus (money or assets put in the trust); (2) a recipient (a child with special needs); (3) a trustee who distributes funds and has control over such disbursements; (4) an intent, often set out in the trust document, which directs the distribution of funds. In order to ensure that the trust document correctly and efficiently achieves its purpose, an attorney specialised in trust formation and management should be used.
The relationship between the corpus, the trustee, and the beneficiary must be defined correctly in the trust document. In order to protect its discretionary existence, it is important to prohibit the beneficiary from receiving the trust agency directly for any reason other than that provided for in the document itself. The most significant element of the Special Needs Trust is the position of the trustee. The settlers (parents) of the trust must nominate, when selecting a trustee, a person of a trustworthy nature who will fulfil his or her fiduciary obligations to the beneficiary. In general, it should be forbidden for the trustee to give cash to the beneficiary, since this might cause the cash to be deemed wages, impacting the eligibility of the beneficiary for SSI benefits. The most significant aspect of a Special Needs Trust is the absolute power of the trustee to decide the timing and quantity of distributions. To maintain the beneficiary qualified for public benefits, the discretionary status of the trust is essential. Although there is no statutory procedure to ensure that trustees comply with their responsibility to care for the child, if the trustee is found not to have asked about the welfare of the beneficiary, they could be held criminally responsible for their failure to inquire about the condition of the beneficiary.
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Amicus Law Firm
95 W 100 S #382, Logan, Utah 84321
Phone Number : (435) 915-4454