An important aspect of estate planning involves considering how people who depend on you will be provided for in your absence. This is especially important for special needs children or other dependents who are disabled. In these instances, a special needs trust may be appropriate.
Under Florida law, a special needs trust is an estate planning vehicle that allows someone to leave money or property to child or disabled person so that it does not count as an asset that would disqualify him or her from Social Security benefits.
But what must such a trust include? Also, how does one go about establishing this important estate planning tool? This post will provide some helpful information.
Special needs trusts, also known as testamentary or third-party trusts, commonly include money, annuities or other assets that can be distributed over time to cover the beneficiary’s costs over a set amount of time. When considering what to include in the trust, one should view it as an extension of their own estate plan in that they should consider what they beneficiary will need in their absence. This may include nursing care, personal needs, and medical expenses.
Creating a special needs trust is no different to establishing any other trust. It is creating a new legal entity that will require a tax return and continuous management. A trustee will be appointed to make decisions regarding the management of the trust, but this person does not do so alone. A financial advisor and accountant are sometimes necessary to manage the assets within the trust and to prepare corresponding tax documents.
For further questions about special needs trusts for children, contact an experienced attorney.
Source: TheFiscalTimes.com, Estate planning guide for a special needs child, July 10, 2013