A special needs trust may be useful for people in Florida who want to help a relative who has special needs or for someone who has special needs to protect certain assets. Special needs trust are a way for people who receive benefits to keep those benefits.
For example, a person who gets Supplemental Security Income is not supposed to have more than a certain amount of money. However, the government allows a person to place assets such as savings, an inheritance or a court settlement in a first-party special needs trust and still qualify for SSI. If there are assets remaining in the trust after the person’s death, they go to pay the government for the person’s care.
A third-party trust allows loved ones to help support a person with special needs. Unlike a first-party trust, there is no requirement that the government be paid back. Therefore, after the person’s death, the assets remaining in the trust can be paid to other beneficiaries including a charity or another family member. There is another type of trust known as a pooled trust. These are set up by a charity to allow pooled resources from a number of beneficiaries. Special needs trusts can also be useful as part of an estate plan because they may reduce an estate’s value for tax or Medicaid purposes.
People are sometimes unaware of the function of trusts as part of estate planning and might not know how they could be useful in a specific situation. For example, a trust might be used to give the creator greater control over when and how beneficiaries receive assets. Distributions might only happen when the beneficiary reaches a certain age or level of education. They could also be decided upon by the trustee. Other uses of trusts include protecting assets from creditors and donating to charity.