Families in Florida may benefit from learning about the advantages related to special needs trusts. For some parents, a special needs trust is the primary tool for helping to ensure a child's future stability. These trusts enable parents to transfer funds for the benefit of a child without hindering the child's eligibility for benefits from the government. Some refer to these types of trusts as supplemental care trusts. This is due to the fact that many people use these trusts to supplement other benefits like Medicaid.
To initiate the process, parents must first select a trustee that will manage the funds responsibly. If the special needs trust is to be used while the parent is still alive, the trustee is tasked with employing a strategy to ensure the funds are not liable to be taxed and are dispensed to the beneficiaries. If the trust is meant to be disbursed after the parent's death, the trustee transfers the funds from the estate into the trust and manages the funds according to the decedent's wishes.
The main advantage with these trusts is that they enhance the parents' ability to save for a child's future while also allowing their child to maintain eligibility to receive government assistance. It is important to remember that the special needs trust should be named as the beneficiary of any assets the parent wants to leave to the child. The funds are then transferred from the trust to the child.
People who need more help establishing a special needs trust may benefit from seeking legal counsel. Lawyers may be able to assist with other issues related to estate planning as well. Estate planning attorneys might also assist with alternative saving strategies that may be more advantageous for a client's particular case.
Source: Pacer.org, "The Special Needs Trust", October 12, 2014