Creating a Special Needs Trust May be a Necessity

Creating a Special Needs Trust May be a Necessity

The ability to create a special needs trust can help families to have peace of mind. This provides a formal legal structure to ensure that someone that has some kind of disability will be taken care of in the financial sense. These can be set up several ways depending on the needs of the people involved.

Why people may need these services

People that are unable to manage their financial affairs are the ones most likely to need this service. Those with severe learning disabilities, mental retardation or Down syndrome, severe mental illness, brain damage from accidents or diseases or other problems that limit their understanding about money management can benefit from having a family member such as a parent set up this kind of trust. These services help people to maintain an income over longer periods of time so that the money is protected and cannot be used in other, unnecessary ways. This helps to limit which parties have access to the account and greatly lessens the possibility of another person misusing the funds. 

One of the most important details about this kind of trust is that it can be structured so that it does not cause the beneficiary to lose the ability to access many federal or state government services that are provided to people in these situations. This can be especially important if the funds in the trust have been the result of a large lawsuit or other settlement that is intended to provide financial assistance to someone over the course of a lifetime. 

These trusts can also be referred to as supplemental needs trusts. These are handled by someone called a trustee that is most often a family member like a parent or sibling but can also be a close friend that is trusted and is willing to handle the task. In addition to legal settlements, these can also be used to manage funds that come from inheritances and other sources of funds. 

Finding someone to set up this kind of trust is fairly easy but how these are created can vary by state. In some places attorneys handle this service while in others it may be possible to use a financial planning service to create one. Anyone that is considering establishing a special needs trust will want to look at the different options that are available in their community. The features and pricing for these services can vary. 

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