What is a special needs trust? A trust is a legal entity in which a person (“the grantor”) places money to be used for the benefit of someone else (“the beneficiary”). The money and assets in the trust are managed by a trustee who follows the instructions set forth in the trust document. A special needs trust is unique because it uses language and mechanisms specifically designed to protect assets for disabled beneficiaries. These legal entities serve to supplement, rather than supplant, public disability benefits.
Perhaps you want to leave money or other assets to an incapacitated individual as part of your estate plan. Or maybe you’d like to give a gift to a family member or loved one with a disability. This is an example of a third-party-settled special needs trust — one funded with money other than the beneficiary’s.
Self-Settled Special Needs Trusts
A self-settled special needs trust is one funded with the disabled beneficiary’s own money and assets. For example, anyone receiving proceeds from a medical malpractice lawsuit should consider placing the funds in a trust to avoid disqualification from public disability benefits.
Failure to protect assets with a special needs trust will result in the loss of disability benefits and could force a rapid spend-down of funds that should have been protected and preserved.
We Are Here To Help
Given the very strict rules and requirements, it is crucial that an experienced special needs planning attorney prepare your special needs trust. If you are in need of a special needs trust, contact your Pittsburgh special needs trust attorneys at McMorrow Law at 724-940-0100 to discuss your case during a consultation.