Why a Special Needs Trust is Important
A special needs trust is an important legal item that parents of special needs children should look into with the help of a family law attorney in New Jersey. At the same time, if you have an adult child or an elderly parent who has special needs, you should also look into the benefits of this type of trust. A special needs trust can help provide for your loved one without removing his or her eligibility for government benefits. How? The trust owns the assets, not the person for whom it was created. This means that the beneficiary of the trust is still eligible for Medicaid and Supplemental Security Income (SSI).
Provide Assets for a Family Member Upon Your Death
One of the most important reasons why you should create a special needs trust is for you to provide assets for a family member with special needs upon your death. These assets can be used by your loved one for anything, including paying rent, buying furniture for a home, paying medical bills, and much more. The initial language you choose for the trust will help determine how the funds can be used.
Assign a Trustee
Another reason why a special needs trust is important is that it allows you to assign a trustee. If you do not want to manage the finances and investments of the trust, and if the beneficiary of the trust is not mentally capable to manage the trust on his or her own, a trustee will be able to do so. The job of the trustee, aside from investing the assets, is to make sure that the assets are being used as intended by the person who created the trust.
Keep Government Aid for a Loved One
If you name a family member in your will who receives government aid and the inheritance is more than $2,000, it can limit the aid your loved one is subsequently eligible to receive. In order to prevent aid from being taken away, you should create a special needs trust. Life insurance benefits and other inheritance can be directed into a special needs trust so your disabled loved one does not have his or her government benefits taken away.
Permit Other People to Contribute to the Trust
A special needs trust can receive contributions from multiple people, not just the person who created the trust. Each year, contributions up to $15,000 can be made by an individual. Married couples can contribute up to $30,000 per year to the trust without triggering any gift tax or generation-skipping tax. Contributions can be made to a special needs trust using cash, securities and other financial resources. The most affordable way to fund a special needs trust is through a second-to-die life insurance policy.
Looking to Create a Special Needs Trust? Call Giro Law Today
If you have a disabled child of any age, or a disabled parent, it is important for you to create a special needs trust. Call the office of Giro Law in Hackensack, New Jersey at (201) 690-1642 to schedule a consultation about your case.