281-771-0560Special Needs Planning Attorneys in Pearland, TX
Helping You Protect Everyone In Your Family!
If you are planning your estate and deciding who will be your beneficiaries, you may not be aware of the pitfalls that await any loved one who relies on government benefit programs should they suddenly inherit a bulk of wealth.
Programs like Supplemental Security Income (SSI) and Medicaid strictly limit the amount of income and assets a person can earn and the assets the recipient can have while still maintaining eligibility. A sudden inheritance could put that person over the limit, and they may become at risk of losing their eligibility for those programs.
It takes proper planning and foresight to pass your assets to a disabled loved one after you pass away. The Hatchett Law Firm has that planning experience and foresight. We can help you plan your estate to benefit only your loved ones while guarding their eligibility.
Call (281) 214-6541 to find out how The Hatchett Law Firm can help you plan for the future.
What is a Special Needs Trust?
A key tool to passing your assets to a loved one with disabilities is something called a special needs trust (SNT). This type of trust is created specifically to assist a person with a disability and ensure they are still eligible to receive government benefits.
When you create a special needs trust for a loved one, you become the trustor. You choose a person or organization that will manage the assets and distribute them. This person or organization is called the trustee. The person who receives the distribution of assets is called the beneficiary.
Because special needs trusts are heavily regulated, you need to choose a trustee who is up for the task of staying informed about the laws and regulations that govern the trust. Sometimes, the beneficiary and trustee are the same person if they are able to manage their own assets. Some cases may see a person in the role of trustor, trustee, and beneficiary, while other cases may see a person as only the beneficiary. It is important to understand a special needs trust, who will manage it, and who will receive assets from it. It helps to have an attorney experienced with special needs trusts who can assist you.
A special needs trust is often irrevocable, meaning that once it is created and funded, it can not easily be modified or revoked. This offers the benefit of protecting the assets within the trust, ensuring the beneficiary has access to both their trust funds and public benefits.
What Types of Special Needs Trusts Are There?
Special needs trusts come in three different varieties, each with its pros and cons.
First-Party Special Needs Trust
This trust is funded with the disabled person’s own assets. This can be an inheritance, a life insurance payout, or even a lawsuit settlement. This type of trust has a Medicaid payback provision, meaning after the beneficiary dies, funds must first be used to reimburse Medicaid for costs it covers before the remainder, if any, can go to successors.
Third-Party Special Needs Trust
This type of trust is funded by parents, relatives, and other interested parties. This trust does not have a Medicaid payback provision, meaning assets within the trust can be immediately distributed to other heirs after the primary beneficiary passes away.
Pooled Special Needs Trust
A pooled special needs trust is managed by a nonprofit organization. It combines the assets of multiple beneficiaries while maintaining individual accounts for each beneficiary. This type of trust may be used when the beneficiary does not have a large amount of assets.
Do You Need a Special Needs Trust Lawyer?
Are you unsure of what type of special needs trust you should use for yourself or a loved one? Are you struggling to choose a trustee who fully grasps the legal complexities of this type of trust and how it benefits a person who relies on social programs? Then contact The Hatchett Law Firm.
Our experienced special needs trust attorneys can answer all of your questions, address your major concerns, and get started on drafting the documents necessary to get your loved one in your estate plan.
The Hatchett Law Firm provides a compassionate approach to educate our clients on what is needed. Call (281) 214-6541 to speak with a member of our team and begin the planning process.