Special Needs Trust Legal HelpA special needs trust can transfer assets to a disabled trustee without affecting his or her benefits. Learn how to find a special needs trust attorney.
There are several government programs available to help disabled individuals receive income and health insurance if they are unable to work. While these programs are helpful, there are some issues. In order to qualify, disabled individuals must remain below certain poverty limits. As a result, they are unable to accept financial assistance without putting their benefits at risk. If you want to help a friend or family member with a disability, you can establish a special needs trust to provide supplemental income without risking disability benefits.
There are several types of special needs trust available. The overall purpose of the trust is to donate assets towards the disabled individual. These costs are normally used to cover medical expenses, help with transportation costs or hiring a caretaker. Setting up a special needs trust is complicated and must be filed correctly. Otherwise, your friend or family member may lose his or her benefits. The safest way to establish a special needs trust is hiring an attorney.
Third Party special Needs Trust
The most common types of special needs trust is third party. These trusts are typically established by family members, but can be any independent party. In order to contribute anything into the trust, it must not have previously come from the trustee. A third-party special needs trust is the most straightforward to create. You must create a trust document, which includes all of the assets you want to transfer to the trustee. You can hire an attorney to oversee the documentation process. Once the document is drafted, you and the trustee must provide signatures, then, your lawyer can file the document with the state to officially transfer the assets.
Non-Pooled Special Needs Trust
Non-pooled special needs trust allow you to share assets that previously belonged to the trustee. This is most common when the trustee was previously able to work, but was recently diagnosed with an illness or disability which made them disabled. In order to qualify for benefits, the trustee must give up some of their wealth. By transferring it into a non-pooled special needs trust, the trustee can turn over the assets to you, allowing you to place them safely in the trust.
Non-pooled special needs trust require more documentation. Previously, the trustee was required to get a third party to sign on their behalf, but thanks to a change introduced in the Century Cure Act, trustees can now sign the documents without bringing in a third party.
Pooled Special Needs Trust
A pooled special needs trust is almost identical to a non-pooled special needs trust, but the party providing the assets must be from a non-profit group. There are a few small differences with the documentation as well. The trustee can write all of the documents, which is placed into a master trust. A second document, the Joinder Agreement, is drafted by the non-profit. The Joinder Agreement lists what assets the trustee receives.
Another difference with a pooled special needs trust is the assets can be pooled together and used for either investment or management purposes. However, each individual asset must still be listed in the master document. There may be additional regulations for a pooled special needs trust, based on your state.
Finding a Special Needs Trust Attorney
One of the best ways to find a special needs trust attorney is through word of mouth. Ask your friends or family members if they previously worked with an attorney. If you are unable to get a recommendation, you can search for a special needs trust attorney online. There are a few different resources available to help with your search. The American Bar Association has a search tool, which allows you to look for certified lawyers in your state. You can search specifically through different divisions of law to find a special needs trust attorney.
If the trustee is a senior citizen, you can search for an attorney through the National Academy of Elder Law Attorneys (NAELA). NAELA focuses on general elder law, but many of the attorneys are also trained in special needs planning. Another option is to look for an attorney registered with the Academy of Special Needs Planners. Finally, there is the Special Needs Alliance.
Once you find a potential lawyer, set up a consultation. The majority of law firms should provide free consultations. This gives you the opportunity to explain what assets you want to transfer to the trustee. You can also ask the lawyer questions to see if they are a good fit for you and the trustee. A good special needs trust attorney will walk you through the process and explain what he or she is doing. You also want an attorney who is reliable and can work with you in the future to amend your existing documents or help transfer new assets. During the consultation, you can also ask about rates and additional fees.