What is a Special Needs Trust in Florida?
Those who have disabled loved ones, children, or grandchildren and are concerned about what will happen to them once they pass away can create a special kind of trust known as a special needs trust. Supplemental or special needs trusts, also called SNTs, are strategically designed for the purpose of caring for a disabled loved one. You can create a fund that will help someone who suffers from a serious disability to ensure that the money you leave for them is spent on their medical care and basic living expenses. In this article, the Dade City estate planning attorneys at The Law Office of Laurie R. Chane will discuss special needs trusts and how they work.
Special needs trusts in general
Special needs trusts are unique insofar as they provide long-term financial protection for disabled individuals without making them ineligible for government assistance such as social security, SSDI, and SSD. There are no restrictions on how much money or what assets you can place into the trust and there is no restriction on how much money can be spent on the needs of the disabled person. In many cases, a disabled person with an SNT will also be eligible for government assistance.
One thing to consider is that SNTs are considered irrevocable trusts. That means that assets cannot be revoked from the trust once they are assigned to the trust. This condition is necessary for the government to exclude the income from consideration when the disabled person is applying for government benefits.
Special needs trust requirements
To be valid, a special needs trust must include all of the following requirements:
- The SNT must have specific provisions provided by law
- The provisions must comply with Florida law to ensure that the assets within the trust are not counted against the recipient for eligibility of government benefits
- SNTs can generally supplement government benefits such as Medicaid
- Trustees have a fiduciary duty to use the funds for the benefit of a disabled individual
Who can create an SNT and for whom?
The purpose of an SNT is to pay for the unique needs of a disabled individual. The trust creator is not required to be a family member. Anyone can create an SNT. In most cases, however, it is typically a parent or grandparent who creates the SNT. It could also be a child who is creating an SNT for their parent who is disabled.
Florida law allows trustees to create this unique style of trust for another person or even for themselves. The money held within the trust is not considered a part of your estate and cannot be taxed as a part of your estate. When someone other than the recipient of the trust creates an SNT, it is called a third-party SNT. Such trusts are common for those with physical or mental illnesses.
Contact a Dade City, FL Estate Planning Attorney Today
The Dade City estate planning attorneys at The Law Office of Laurie R. Chane represent the interests of those who are creating a special needs trust for their loved one. Call our office today to schedule an appointment, and we can begin the process of creating your trust right away.
