Are you a parent or guardian of a child with a disability? If so, you may consider creating a Supplemental Needs Trust to protect your child following your passing. This Trust allows those with special needs to receive government benefits while also allowing them to retain funds for personal use. The beneficiary uses these funds to improve their quality of life or to cover any additional expenses that may arise. People who have a mental illness or a physical or mental disability are eligible for this type of Trust.

Once you have decided to create a Supplemental Needs Trust, you must choose between three different types.

Third-Party Special Needs Supplemental Trust

Firstly, there is the Third Party Special Needs Supplemental Trust. Someone who is not a disabled person creates the Trust and then funds it. Once the beneficiary with special needs passes away, all funds are returned to the settlor, and none are used to pay back the state. This type of Trust is available to those with special needs of all ages.

Pooled Trust

Secondly, there is the Pooled Trust. The disabled person, parents, grandparents, or legal guardian can create the Trust. Assets from the person with special needs are then funded. The unique part of this kind of trust is that the trustee must be a non-profit organization, and the disabled person would then join using a Joinder Agreement. Each beneficiary has an account, and they pool the funds to invest in them. This form of Trust is available to all ages, as long as the individual is disabled.

Self-Settled Special Needs Trust

Finally, there is the Self-Settled Special Needs Trust. A parent, grandparent, or legal guardian of the person with special needs must create it. Following this, assets the individual owns or is entitled to fund the Trust. Once the beneficiary passes away, the Trust pays any remaining funds to the state to pay for any Medicaid received, and then the settlor distributes the rest. This Trust is available to any disabled person under the age of 65.

To that end, don’t hesitate to contact us today for further information if you have any questions about Guardianship, Power of Attorneys, Living Trusts, or other areas of concern.

Dylan Hunn is the Communications Director at Tuohy Law Offices.

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This blog entry is for information and planning purposes. Therefore, it is not legal advice. Please do not use this blog as legal advice, which turns on specific facts and laws in specific jurisdictions. No reader of this blog should act or refrain from acting based on any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader’s state, country or other appropriate licensing jurisdiction.

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