The diversity of estate planning tools available for Texans is vast, and without guidance, it can be difficult to figure out which tool works best for your individualized needs and goals. One specific tool that might be useful for you or a loved one is called the special needs trust. In today’s blog, we review the special needs trust – its advantages, its implications, and important tips to keep in mind if you are thinking about pursuing this trust for someone in your life.
The special needs trust is an irrevocable trust that benefits a physically or mentally disabled individual. The money put in this kind of trust is untouchable to creditors and lenders, and it is managed by a trustee who controls the trust’s assets. Under the law in Texas, the trustee cannot give the trust’s beneficiary money directly from the trust, but he or she can instead use the money to cover the beneficiary’s education, medical needs, and services that might be needed to help the beneficiary navigate his or her disability.
One important advantage of the special needs trust is that the money in the trust does not contribute to the beneficiary’s income for purposes of Social Security Income (SSI). If a disabled person wants to receive these benefits, he or she cannot have more than $2,000 to his or her name. With the special needs trust, however, the amount of money held in the trust has no bearing on this $2,000 maximum. The trust therefore allows these beneficiaries to both receive SSI and, at the same time, keep money in the special needs trust.
Especially with special needs trusts, it is crucial to trust the person you decide to appoint as trustee. You must ensure that whoever you decide to appoint will do everything in their care to look out for the beneficiary’s best interest, given the amount of discretion they can have as they manage the funds.
Ultimately, establishing a special needs trust can be an important step, and speaking with an estate planning attorney can help you figure out if this would be the right call for you or a loved one. By taking the time to solicit expert advice on the front end, you can make sure you are thoughtfully organizing your assets in a way that is beneficial and that takes care of your short-term and long-term needs.
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At the Law Office of McCulloch & Miller, we offer legal representation and advice to Texans that is backed by over 35 years of experience. We are proud to treat each case and client with the individual care they deserve, and we would be proud to offer you personalized estate planning services that fit your priorities. For a consultation with a member of our team, call us today at 713-955-7281. You can also fill out our online form to tell us about yourself and have an attorney reach back out to you as soon as possible.