When it comes to ensuring the long-term financial security and well-being of individuals with disabilities or special needs, usually people who cannot take care of themselves on their own and need assistance from others on a day-to-day basis, special needs trusts play a crucial role.
What is a special needs trust?
A special needs trust (SNT) is a legally binding arrangement designed to protect assets for a disabled individual or an individual with special needs while maintaining their eligibility for government assistance programs like Supplemental Security Income and Medicaid.
People can create these trusts for individuals who have physical or mental disabilities and may require additional financial support throughout their lives.
Benefits of special needs trusts
There are many benefits to creating a special needs trust. Among them:
- Saving assets for a disabled person
- Preserving the disabled person’s eligibility for public benefits
- Enhancing the disabled person’s quality of life
- Supplementing the disabled person’s financial needs
- The disabled individual will have funds for various purposes, including medical expenses, education, housing and accommodations, transportation, recreational services and more.
Who manages special needs trusts?
When a person creates a special needs trust to protect a disabled person, they choose a trustee. The trustee is the person who will manage the trust fund and ensure they disburse the funds for the intended purposes.
Types of special needs trusts
There are three different special needs trusts. The differences between the three types are primarily in who funds and manages the trust. The three types of special needs trusts in Florida are:
- First-party special needs trust
- Third-party special needs trust
- Pooled trust
In addition, Florida requires that the beneficiary of the special needs trust meet certain criteria, such as having a qualifying disability and being under the age of 65 at the time of funding.
Special needs trusts are powerful and valuable estate planning tools for people who want to protect a disabled person someone who will need additional resources to care for themselves beyond what the government can provide.