Hi, my name is Paige Fox. I’m a senior associate attorney here at Dent Coulson Elder Law and I understand these topics are very complex. So, I’m hoping these Elder Law Minutes can bring some insight and some more understanding to both potential clients and current clients. Thank you.
Video Transcript:
Introduction
Hi, my name is Paige Fox. I’m a senior associate attorney here at Dent Coulson Elder Law and I understand these topics are very complex. So, I’m hoping these Elder Law Minutes can bring some insight and some more understanding to both potential clients and current clients. Thank you.
Different Types of Special Needs Trusts
Most people have heard of what’s called a special needs trust, but I think a lot of clients don’t realize that there’s different types of special needs trusts out there that can account for a bunch of different situations. The main couple that I want to talk about are the first party special needs trust and the third party special needs trust. The first party special needs trust is created by the individual with the disability themselves and the money that is put into the first party special needs trust is funded with the money of that individual.
Focus of the Day: Third Party Special Needs Trust
The topic we’re going to talk about today is the third party special needs trust. Third party special needs trusts are created by somebody that is not the individual with the disability, but oftentimes a parent or another loved one that creates the third party special needs trust as part of their own estate plan. One of the most common ways to do this is to have your own revocable living trust and then have, separately, a third-party standalone supplemental or special needs trust for the individual with the disability. And then in your estate planning document, so let’s say I had three kids. One of my children has a legal disability. So in my estate plan, what I would do is I would do — and you can do whatever distribution you want, this is an example — but I would do 1/3 to child 1, 1/3 to child 2, 1/3 to the special needs trust for child three.
Benefits of a Third Party Special Needs Trust
This allows the money that you want to give to your child to go for their benefit without having to impact their ability to get public benefits — SSDI, SSI, any sort of public benefits. And it is kept in a separate trust for their benefit, but it cannot be used for things that are covered by supplemental benefits or public benefits. And what’s also nice about a third party special needs trust is if I set it up and then I hear about whether it’s a grandparent of my child or, you know, a family friend or the father of my child that also wants to leave money to that individual, then they can also leave it to that trust that you have created which, in turn, will allow that money to, again, be set aside for their benefit without having to impact their ability to get public benefits to cover their care.
Recommendation and Closing
If you, or anyone you know has a loved one with a disability and you are trying to figure out how you can plan for them and leave them money without impacting any of their public benefits, I recommend talking with our firm or another elder law or special needs estate planning law firm to discuss the best ways to handle that moving forward to make sure that your loved one is protected without impacting their benefits.
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Dent Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older.
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“Your Trusted Advisor on the Elder Care Journey”
Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.
