Articles Posted in Special Needs Planning

For individuals with a special needs loved one, creating a Houston special needs trust can drastically improve their lives. Special needs trusts allow individuals to still receive government disability benefits while simultaneously receiving property and assets. However, there are two different types of special needs trust: first-party and third-party trusts. While these special needs trusts have many similarities, there are critical differences between the types of trusts. Because of this, knowing the differences between a first- and third-party trust is critical before people decide which trust is right for them and their loved one.

Third-Party Special Needs Trusts

The major distinction between first- and third-party special needs trusts is who is funding the trust. Simply put, a third-party trust is funded by family members, whereas first-party trusts are funded by the individual with special needs.

Estate planning is critical for people of all ages and especially important for people with varying life circumstances. For instance, families who have children with special needs should think about developing an estate plan and putting specific provisions in place for their children. One such measure parents should take is creating a Houston special needs trust for their children. This protects any potential public benefits the child may receive in the future while still allowing families to indirectly assist their special needs loved one with fulfilling their basic needs.

What is a Special Needs Trust?

A Special or Supplemental Needs Trust is created to hold the property of a special needs person and distribute the funds to them in a way that still preserves their eligibility for public benefits. Many government programs, such as Supplemental Security Income (SSI) benefits and Medicaid, offer benefits to special needs individuals; however, to qualify for these programs, an individual cannot own more than $2,000 in assets. However, many family members want to give their loved one assistance without disqualifying them for these benefits. Without a special needs trust in place, giving gifts or assets directly to another person will likely result in losing any public benefits.

Parents know their children better than anyone else. While this stands true for any parent-child relationship, it is especially applicable in families who have a child with special needs. Given the challenges that many children with disabilities face, parents may have valid concerns about what will happen to a child with special needs once they are gone. Creating a Houston special needs plan is an important step in the estate planning process that parents can take to provide themselves peace of mind, as well as provide their child with the support they need to live a long, fulfilling life.

One crucial element of a Houston special needs plan is the letter of intent. A letter of intent is simply a letter, drafted by parents, that includes vital information about their child to future caregivers. Unfortunately, letters of intent are often overlooked by parents who intend on having another family member take over the care giving role once they are gone. However, even if relatives are close with a child, they may not know all of the necessary information that a parent would hope to pass on. Further, in the event a familial caregiver passes away or becomes incapacitated themselves, vital information about the child would be lost. Thus, even if a family member is planning on assuming the caregiver’s role, a letter of intent is still important.

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