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Special needs trust: a tailored, effective estate planning tool

| Jul 19, 2021 | Estate Planning

An established New York legal source on estate planning duly notes that “trusts are a powerful tool.”

Here’s why: There are myriad types of trusts in the estate planning realm, and they are notably flexible vehicles that can be established to creatively address wide-ranging needs.

The above source duly notes that properly crafted trusts “can achieve many goals that a will cannot.”

The broad applicability of estate planning trusts

Some individuals and families across the Hudson Valley Region wisely employ one or more trusts in tandem with a will, with complementary interaction between those core planning tools seamlessly addressing present and future needs.

In many other instances, trusts can be profitably established as stand-alone instruments. A well-considered and soundly drafted trust can promote many goals, including these:

  • Privacy interests (trust details are often well shielded from public scrutiny)
  • Probate avoidance (sparing time, money and sometimes conflict)
  • Charitable giving
  • Lawful tax avoidance
  • Grantor control over inheritances/future money distributions

Drafting a special needs trust to help a vulnerable loved one

It is true that many Americans materially challenged by a physical, mental or emotional disability qualify for and receive some type of government help.

And it is just as true that such assistance, while helpful, often fails to fully meet their needs.

That is where a special needs trust comes in. That specialized planning tool is set up by a creator/grantor – often parents or other key care provider – on behalf of a disabled loved one. A trustee is appointed to manage trust assets that will be distributed as directed to promote the beneficiary’s needs. Those can be clothing, job training, medical rehabilitation or many other things.

A national legal overview of special needs trusts underscores that those planning instruments are often used “to ensure that the beneficiaries don’t lose government benefits they are receiving.”

Take Supplemental Security Income for instance. SSI payments are need-based and contingent upon a recipient not exceeding a certain income threshold. A received inheritance from a will can easily – and unforeseeably – result in excess income and bar future government help.

A special needs trust protects against that possibility and additionally provides for a number of other benefits.

A proven estate planning legal team can provide further information.