Protecting Family Assets with Special Needs Trust

A  third-party special needs trust (SNT) is an essential tool for families seeking to protect assets while ensuring the financial security of a loved one with disabilities. This type of trust allows parents, grandparents, or other benefactors to provide for a beneficiary without jeopardizing their eligibility for vital government assistance programs such as Supplemental Security Income (SSI) and Medicaid.

One of the primary benefits of a third-party SNT is that the funds in the trust are not considered assets of the beneficiary. Because the trust is established and funded by someone other than the person with special needs, the beneficiary can continue to qualify for means-tested government programs while benefiting from additional financial resources. These funds can be used to cover expenses not provided by public assistance, such as medical treatments, therapy, education, housing, and personal care services.

In addition to safeguarding eligibility for government benefits, a third-party SNT provides protection from creditors and ensures proper asset management. A designated trustee manages the trust, making distributions according to the beneficiary’s needs while adhering to legal guidelines. This ensures that funds are used responsibly and in the best interest of the individual with special needs.

Furthermore, third-party SNTs offer flexibility in estate planning, allowing family members to contribute assets through wills, life insurance policies, and other financial instruments. This structured approach ensures long-term financial security and peace of mind for both the beneficiary and their family.

Overall, a third-party special needs trust is a vital estate planning tool for protecting family assets while securing a stable and enriched future for individuals with disabilities. Proper legal guidance is essential in establishing and maintaining the trust to ensure compliance with all regulations and maximize its benefits.