A special needs trust is a legal arrangement designed to benefit individuals with disabilities by supplementing their government assistance without jeopardizing their eligibility for programs such as Supplemental Security Income (SSI) and Medicaid. This type of trust can hold various assets, ensuring they are used for the beneficiary’s needs and managed by a trustee. Here are three types of assets that can be placed in a special needs trust.
Bank Accounts
One type of asset that can be placed in a special needs trust is a bank account. This can include checking, savings, and money market accounts. By placing the funds in a special needs trust, the beneficiary can access the money for various purposes without affecting their government assistance eligibility. The trustee will manage the funds, ensuring they are used appropriately for the beneficiary’s needs, such as paying for medical expenses, educational needs, or other essential living expenses that government benefits may not cover.
Homes
Another asset that can be placed in a special needs trust is a home. By placing the property in the trust, you can ensure that the beneficiary has a stable and suitable place to live without jeopardizing their government assistance. Without a trust, your home will pass through probate court before your heir receives it. This process can be lengthy and costly, and may result in the beneficiary losing their eligibility for government benefits due to the inheritance. By placing the property in a special needs trust, you can avoid these potential complications and provide a secure and comfortable living situation for your loved one.
Investment Accounts
Investment accounts, such as stocks, bonds, and mutual funds, can also be placed in a special needs trust. By doing so, the beneficiary can benefit from the investment’s growth and income without affecting their government assistance eligibility. The trustee will manage the investment accounts, ensuring they are invested prudently and used for the beneficiary’s needs. This can provide long-term financial stability for the individual with special needs, allowing them to maintain a higher quality of life.
A special needs trust can be a valuable tool for providing financial support and stability to individuals with disabilities while preserving their government assistance eligibility. By placing assets such as bank accounts, homes, and investment accounts in a special needs trust, you can ensure that your loved one’s needs are met without jeopardizing their access to essential government programs. If you have a family member with special needs, it’s crucial to consult with an experienced attorney who can help you establish a special needs trust tailored to your specific situation and goals.
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