Special Needs Trusts Attorneys in Sugar Grove, IL

Kane County Attorneys Creating Special Needs Trusts

Any good estate plan needs to take into account not only how you want your assets and property distributed after your death, but also how you intend to provide for your own expenses during your lifetime. For those who are retired or nearing retirement and who have significant property or assets, an effective estate plan might include a special needs trust.

What is a Special Needs Trust and Who Needs One?

An individual who is age 65 or older, who is blind or disabled and has limited income and assets may be eligible for Supplemental Security Income (SSI) and/or Medicaid. SSI benefits are meant to cover some basic living expenses, while Medicaid is a state-run, federally-funded program that assists recipients with medical expenses. Eligibility for both programs depends in part on your income and assets. In other words, if you have significant assets or income, you may not qualify for SSI benefits or Medicaid.

In times past, this situation posed a dilemma for individuals who had significant assets but who otherwise qualified for SSI and/or Medicaid: they were faced with the choice of keeping their assets and foregoing SSI and/or Medicaid benefits, or spending or disposing of their assets in order to qualify for benefits. A special needs trust addresses these concerns. When properly set up, a special needs trust will allow the beneficiary (the one who sets up the special needs trust) to place his or her assets into the trust. This lessens the assets the person has on hand, thus enabling him or her to qualify for SSI and/or Medicaid. The assets remain available, however, to pay for special needs and expenses that the person may face that are not covered by Medicaid or SSI.

Two Types of Special Needs Trusts

There are two types of special needs trusts; which one is set up for a particular individual depends on that person’s age. The first type of trust is established for individuals under the age of 65 and must be set up by a parent, grandparent, guardian, or court. Once the beneficiary of the trust turns 65, no further assets may be added to the trust.

The second type of trust is established for people over the age of 65 and is established by a parent, grandparent, guardian, court, or by the disabled person him- or herself. The assets in this trust are “pooled” or combined with the assets of other individuals for investment purposes. While each individual maintains his or her own sub-account, the pooling of assets allows for better investment opportunities.

Each type of trust is administered by a trustee. The funds in the trust may not be distributed directly to the beneficiary but may be used for the beneficiary’s benefit. Clothing, attorney’s fees, taxes, and other such expenses may be legitimate uses for the assets in a special needs trust.

Contact White & Ekker, P.C. Today

Creating a special needs trust require the assistance of a knowledgeable Kane County estate planning attorney. At White & Ekker, P.C. we can help you determine if a special needs trust is right for your situation and help you complete the proper steps to set one up. Contact us today for assistance.

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