3 Types of Special-Needs Trusts
If you have a child or close friend who is disabled and receives supplementary social security, then you need to set up a special needs trust with a trusted administrator. There are three types of trusts, so it is important that the right one be chosen. Understanding the types of special-needs trust helps you choose the one that is best for your disabled friend or child.
What Is the Most Common Type of Special-Needs Trust?
A person’s family can set up a special-needs trust during their lifetime or instruct that it be set up after their deaths. Anyone can put money into the trust by writing a check directly to the trust or leaving money in his or her will to be put in the trust. Parents and grandparents often direct their life insurance to be placed in the trust. The only person who cannot put money in the trust is the disabled individual. The money in the trust cannot be used for housing, clothing or food. If money is spent in this way, then the person’s SSI payment is reduced.
What Is a Pooled Special-Needs Trust?
A pooled trust is operated by a non-profit with each individual putting money in the trust having their own individual account. Like investment accounts, the power behind pooled special-needs trusts is that many people are in the same fund, so growth investments are sometimes easier to make. The non-profit decides how funds within the trust are spent. Any money left in the trust after the person passes away is spent on taking care of the needs of other special-needs individuals.
What Is a Court-Ordered Special-Needs Trust?
Court-ordered special-needs trusts are sometimes established so that a person can get the medical care that they need despite getting an insurance settlement or receiving an inheritance. It can be extremely difficult to spend any money in these trusts. After the person passes away, any money left in the trust goes to the state to pay them back for providing the medical care while the person was alive.
If your loved one is disabled, then make sure to contact a trust administration lawyer in Las Vegas to learn more details about each type. They can help you decide which one is best based on the individual’s circumstances.