A common concern for many is how to protect their family members who have special needs. Leaving guardianship questions aside today, what can an estate planning attorney do to keep an inheritance from jeopardizing eligibility for government benefits like Social Security Income (SSI)? In conjunction with other estate planning tools a special needs trust can be instrumental in protecting government benefits.

Most trusts Schmidt & Lerner, LLC drafts are revocable trusts meaning the grantor or grantors may cancel or change their trusts at any time. Special needs trusts, however, tend to be irrevocable. When grantors or others fund the special needs trust, the trustee controls the property (subject to the terms of the trust instrument) and the original owners of the property cannot demand its return. The trust property usually cannot be reached by creditors and the trust is designed to survive the parents or other caregivers of the beneficiary with special needs.

Please note, a grantor or grantors may have (often have) more than one trust in an estate plan. Parents of a child with special needs might have in their estate plan a revocable trust, an irrevocable trust, a different irrevocable special needs trust, wills, and myriad other estate planning tools. Each tool serves a separate but important purpose. What an estate plan contains depends on the unique circumstances and wishes of the clients.

Having introduced the concept today, tomorrow we will discuss a couple different types of special needs trusts and how they protect government benefits.