A special needs trust (SNT) is primarily used to provide support in the future for a dependent, while avoiding disqualification from assistance programs provided by the government. The funds within the trust are shielded from creditor claims, including landlords, lenders and credit card companies – similar to other types of trusts. One or more trustees oversee and invest assets from the trust, and these trustees can include family members and other independent professionals.
Several types of SNT exist, such as first-party or self-settled trust, used when the disabled individual receives a court-mandated settlement, an inheritance, or when they own property prior to the disability.
A third-party SNT is often created by parents with a disabled child, and these trusts are created and funded by someone other than the beneficiary.
Welfare programs are ever-changing, and it is crucial to select the particular SNT without jeopardizing access or funds by any government assistance eligibility, which could be very costly. Additionally, the laws and rules encompassing SNTs are particularly complex.
When your goal is to select the best option available for your loved ones, you will need to plan ahead in order to provide care for dependents coping with disabilities. This likely will require a lot of patience, research and time, but you will be able to maximize their quality of life as well as safeguard their care in the present, and after you are unable to provide it any longer.