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Why should I set up a special needs trust for my disabled child?

More often than that, a trust is created as a tool for managing an individual's tangible assets, such as finances or real estate, for someone else's benefit on down the road. In many cases, an individual may create the trust so that his or her assets will be more easily transferred to that person's beneficiaries upon his or her death.

A special needs trust is unique in that it involves the setting aside of funds exclusively for either a mentally ill or physically disabled person. For an individual without the mental ability to handle his or her finances, a special trust may be created to place government benefits into to cover his or her lifestyle and other necessities.

The creation of a special needs trust often involves the appointment of a future trustee to take over the management of the trust once the original one parishes. Oftentimes, there's a family member in mind that the individuals setting up the special trust wish to appoint to that role. If there isn't, a request can be made to have the court appoint one.

Having a special needs trust in place if you have a mentally disabled or physically handicapped child is particularly important. It gives him or her a higher likelihood of continuing to receive government benefits such as Medicaid, housing vouchers, Supplemental Security Income (SSI) or occupational rehabilitation.

In instances in which a special needs trust doesn't exist, any assets inherited via a will may ultimately disqualify them from continuing to receive those benefits.

Creating a special needs trust can protect your disabled child from losing those same governmental benefits if he or she wins a lawsuit as well. Additionally, if your child is ever sued him or herself, then having a special needs trust in place will essentially make his or her assets contained within it judgment proof.

If you have a disabled child and your're considering setting up a special needs trust to prepare for his or her future after you're gone, then a Queens estate planning attorney can advise you of the benefits of doing so.

Source: FindLaw, "Special needs trusts FAQ's," accessed Dec. 07, 2017

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