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When should I consider having a special needs trust?

On Behalf of | Oct 7, 2022 | Estate Planning |

There are two groups of people who may need to set up a special needs trust.

First, families who have a loved one suffering with a serious mental or physical disability may consider setting up a third-party special needs trust.

This type of special needs trust would involve a person’s creating a trust for the benefit of the loved one with the disability. The person creating the trust is also the one who funds the trust.

In some cases, a person might wish to create a first-party special needs trust. The difference in this type of trust is that the person who will benefit from it also funds it.

People often use these types of special needs trusts to help those who have received proceeds from personal injury claims.

Adults who need to plan what to do with some of their excess assets also may use first-party special needs trusts, as might children who willreceive an inheritance and have special needs.

Why would I want to consider a special needs trust?

Special needs trusts have a number of advantages.

Many families in the Las Vegas area use these trusts as a way of making sure they or their loved ones can remain eligible to receive Medicaid and other government benefits.

These types of programs require people to show they have limited income and assets. If a person has too much wealth, they may have to dispose of their property in order to qualify for government aid.

Furthermore, even giving away one’s property can create complications with government programs.

Without a well-drafted special needs trust, a family might face a painful decision of having to decide whether to make sure their loved one can get the care and support they need through the government or meeting their loved one’s other needs.

Avoiding this difficult choice is one reason why many Nevada families will find a special needs trust an attractive legal option for estate planning.