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Work with experienced attorney to properly set up, fund special needs trusts

Previously, we began looking at the topic of properly funding trusts. As we mentioned, failure to do so can result in frustration of the purpose of the trust. Proper funding can be looked at from at least two angles: funding with the right type of assets. Again, which assets are used to fund a trust depends on various factors, including how assets are held and the goals of the estate plan.

One type of trust it is particularly important to properly fund is special needs trusts, which are established for the benefit of loved ones who are able to qualify for government support, such as Social Security benefits and Medicaid. Because applicants for these funds are subject to means testing--which takes into account the individual's assets--it is important for parents of special needs children to come up with effective strategies to ensure their wealth is passed on for the child's long-term benefit. 

The idea behind special needs trusts is to fund them with assets that aren't owned by the beneficiary so that they aren't counted against the child for purposes of means testing. Placing assets in trust for the benefit of a special needs child also helps ensure that creditors are not able to reach those assets and deplete the child's means of long-term support.

For those who have the ability to do so, setting up a special needs trust for the benefit of a child helps ensure the child is able to qualify for the benefits he or she needs without quickly depleting his or her share of the family wealth. Like anything else in estate planning, though, properly setting up these trusts is key to ensuring they are effective in achieving their purpose. 

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