Serving High-Net-Worth Families Nationwide Since 1983

Client Login

Special Needs

Estate planning involves extra customization to meet the needs of families that need to care for a loved one with special needs. At Creative Planning Legal, we have implemented hundreds of special needs trusts, helping families ensure that their assets will be there in perpetuity to benefit their loved ones.

  1. What is a Special Needs Trust?
    A Special Needs Trust is a trust that holds money for your special needs beneficiary and provides for his or her needs above and beyond what the government is required to pay. The trust prohibits the use of the trust funds to replace the benefits and assistance provided by any public benefits program. When you establish the trust, you name a person to manage the money for your beneficiary (the trustee), and this person will use the trust money to pay for things such as medical and dental expenses, annual independent checkups, clothing and equipment, programs of training, education, treatment and rehabilitation, private residential care, transportation, maintenance, insurance, and essential dietary needs. The trustee may also use the trust money for radios, record players, television sets, computer equipment, camping, vacations, athletic contests, movies, trips, and money to purchase appropriate gifts for relatives and friends. In general, the special needs trust is used for the benefit of the beneficiary, providing for anything that can improve the quality of life of the beneficiary without interfering with or replacing public assistance.
  2. Who needs a Special Needs Trust?
    Individuals who most likely require a special needs trust are those 1) with a severe and chronic or persistent disability, 2) with a disability that is expected to, or does, give rise to a long-term need for specialized services, or 3) who are receiving government benefits for their disability.
  3. Special Needs Trust vs. Testamentary Trust
    Most people use a testamentary trust on their death to provide for their children’s health, education, and support until they reach a certain age, at which time the money in the trust is distributed to the child. A testamentary trust is not suitable for a special needs beneficiary because the distributions from the testamentary trust would supplant the benefits provided by the government and would make the special needs child ineligible to receive these benefits. If a child is not disabled enough to qualify for government benefits, then a testamentary trust may be a more appropriate planning tool for the beneficiary.
  4. What does a Special Needs Trust accomplish?
    A person, such as a family member, may establish a Special Needs Trust for a disabled individual without jeopardizing the beneficiary’s eligibility for Medicaid and other government benefits. For example, upon your death, instead of giving your beneficiary $100,000, you may put the $100,000 into a Special Needs Trust. This allows your beneficiary to receive proceeds from the trust for extra care while retaining the benefits owed to them by public assistance programs.
  5. How do I choose a trustee for the Special Needs Trust?
    The trustee should be someone who you trust and who is familiar with the needs of your special needs beneficiary. Some people choose family members or close friends to act as trustee since they are close to the special needs beneficiary and are motivated to spend the time to manage the trust. If you name a family member or friend as trustee, you have the option to pay them a yearly salary for their efforts out of the Special Needs Trust. Some people choose a bank, trust company, or other professional to manage the money in the Special Needs Trust. Some of these companies may be better equipped to research benefits that are owed to your special needs beneficiary. Professional trustees are usually paid a certain percentage of the trust’s assets every year.
  6. What happens to the Special Needs Trust on the death of the beneficiary?
    You may designate any person or organization to receive the remaining proceeds of the Special Needs Trust once the special needs beneficiary is deceased, and the Special Needs Trust will terminate.

Contact Us