Special Needs Trusts- Five Fundamental Facts

Posted by Patricia Manko on Tue, Mar 13, 2012 @ 03:38 PM

trust, security, care


 A special needs trust is a legal document that allows you to leave an inheritance to your child without disqualifying him or her for government benefits. 



The establishment of a special needs trust can provide a false sense of security that you are all set.  The money that funds the trust will secure the resources for your loved one to be cared for.


 Here are some basic facts to know:

  1. It is very important to preserve your child’s government benefits when providing supplemental support for their care. Working with a qualified team of advisors and in the case of a trust, a knowledgeable and experienced disability law attorney is essential. Two resources we recommend for help finding trained individuals are: the Special Needs Alliance and Special Needs Answers .
  2. Once the trust has been established, provisions must be made for funding the trust.  Special Needs Trusts may be funded either during a Grantor’s lifetime or upon death. Your personal circumstances will dictate the best course of action. A variety of assets may be used to fund the trust including liquid and investment accounts, real estate, life insurance proceeds and retirement accounts.
  3. The role of trustee need be fully understood and given careful consideration.  A trustee is a fiduciary and is responsible for fulfilling the responsibilities set out in the trust.  These responsibilities may include investing the money of the trust, making correct distributions from the trust on behalf of the beneficiary, keeping records and providing an account to the beneficiary. The trustee is often a professional businessperson, attorney or accountant . 
  4. A Special Needs trust supplants the need to disinherit your child with special needs or leave his or her share of your assets to another individual with the understanding that they will provide oversight and care. 
  5. The overriding goal in establishing a special needs trust is to provide for the wellbeing of your child, ideally addressing not only their health, but their happiness as well. The most important step for both you and your child is independent of the trust’s formation: it requires gaining the advice of an expert familiar with your unique situation, to assure you that you are doing all you can to utilize your resources for their future dreams and supports.

These are just some basic facts concerning Special Needs Trusts. To learn more about Special Needs Trusts, contact us at specialneedsplanning@shepherdfinancialpartners.com .



Tags: Special Needs Financial Planning, Special Needs Trusts, financial planning

Six Questions to ask Yourself about Your Financial Plans

Posted by Patricia Manko on Thu, Mar 08, 2012 @ 03:02 PM

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1. What is my vision of the legacy which I wish to leave my child (or other family member) with special needs?

2. Have I established proper Wills & Trusts that transform my clear vision into an absolute future reality?

3. Does my Executor/trix or Guardian have a Letter of Intent which outlines my wishes for the future care of this person?

4. Will this Letter of Intent be passed to others who may eventually care for my child, should s/he out-live my second caregiver?

5. Is the Trust endowed with enough money to assure that distributions will not consume their principal throughout the beneficiary's lifetime?

6. Have I insured that caregiving survivors are financially protected from the future expenses in the care of my loved one with special needs?

So... Are you all set?

If you answered "No" to any question, your plan is not complete. We encourage you to seek the answers to all these questions.

 Here are a couple of first steps:


1. Identify and prioritize your goals

2. List your resources and expenses, including personal net worth, income sources and earnings, and expenses.

By doing the first two initial steps in the financial planning process prior to the legal planning process, you will at least have a good understanding of your financial situation to help determine the extent of the legal documents required.

These steps will determine whether the value of your assets are large enough to warrant specific estate tax planning techniques in addition to the basic estate planning needs.

Without developing a clear and current picture of your financial matters first, you can end up with inappropriate legal documents being created. This can then lead to the use of inappropriate financial products, and can ultimately lead to unnecessary legal and financial fees.


Tags: Special Needs Financial Planning, Special Needs Trusts, financial planning

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