Establishing Trust Funds for Special Needs Children in Illinois

special needs children, Illinois Special Needs Trust AttorneySpecial needs children often require expensive care and treatment, and parents may worry about who will care for their children in the event of an untimely death. Parents may even seek counsel from estate planning attorneys to determine their options and gain information regarding trusts for their children with special needs.

Special Needs Trusts — The Basics

Special needs trusts are established so that parents with special needs children can put money aside to be used for a child’s care at a later date. Any funds in the trust are protected and will not impact the amount of money a disabled child or person receives from other sources such social security. Even though there may be thousands of dollars in a trust fund, the individual will still retain all rights to Medicaid for health insurance benefits.

Special Needs Trusts — Financial Security

If a trust fund is not set up in the name of a special needs individual, any monies that person receives can impact social security and Medicaid eligibility. In Illinois, a disabled person cannot have an income more than three times over the poverty level, or receive more than $2,000, and still receive supplemental security income or government health benefits. Once access to these resources has been cut off, an individual would have to re-apply to all programs and prove that he or she has no additional financial resources, therefore causing potential financial hardship. This problem can be eliminated by having a special needs trust fund set up in the individual’s name.

Special Needs Trusts — Provisions

Individuals who are guardians of a child or children with special needs should consider making provisions for a supplemental needs trust in their wills. This will entitle a special needs individual to adequate financial provision upon the death of his or her caretaker. There are also options for setting up and paying into a special needs trust while a guardian is still living. If done properly, this will not affect a disabled individual’s eligibility for government assistance.

A third option is to set up a special needs trust to hold significant amounts of money granted to the special needs child—inheritance paid out from the death of another relative, for example. This money can go into a trust that has been certified by a public court to ensure the special needs individual will still qualify for his or her other benefits.

For more information about how to establish a special needs trust for your child, please contact a DuPage County special needs trust attorney today to schedule a consultation. We are proud to be of service to Illinois families and we look forward to working with you.

A Brief Guide to Special Needs Trusts

disabled people, special needs beneficiary, special needs trusts, supplemental care trusts, Wheaton special needs trust lawyerAnyone with special needs or disabled relatives wants to do everything they can to ensure the most comfortable and opportunistic future. Setting up a trust is one way to accomplish this. A trust is an agreement in which a third party, known as the trustee, holds assets for the beneficiary.

Setting up a trust for beneficiaries with disabilities can be challenging. While it is true that creating a special needs trust can be more involved than setting up a traditional one, these trusts can help provide for the needs of loved ones. The first step in deciding if a setting up a trust is a smart option is to understand how special needs trusts operate.

The laws that relate to special needs trusts are complex and often confusing. As the World Institute on Disability reports, disabled people cannot legally have a trust for themselves. However, this does not mean they will be excluded from an inheritance.

Instead of being a direct beneficiary, a disabled family member will receive what is commonly known as a “supplemental care trust.” This system works to ensure that inheritance money does not directly interfere with any government benefits, namely Supplemental Security Income and Medicaid.

Supplemental care trusts require the appointment of a trustee to manage the money for the intended beneficiary. Not only does this avoid any chance of wrongfully disqualifying one for SSI and Medicaid, but it also helps ensure responsible management of the beneficiary’s money.

It is important to understand, however, that there are times when a special needs beneficiary may no longer qualify for government assistance. A variety of factors, including the type of disability, the amount of government assistance they are currently receiving, and how much they are likely to inherit will factor into this decision.

If you are interested in setting up a supplemental care trust, a Wheaton special needs trust lawyer may be able to help. At the Illinois law office of Stock, Carlson, Flynn & McGrath, LLC., our clients’ needs are our top priority. Contact us today at 630-665-2500 to schedule a consultation.

Special Needs Trusts

Many people do not think about planning for their estate until they reach middle-age, but life is different for people with disabilities. Many people create trusts in their older age to clearly state what will be done with their money, assets and other belongings, along with funeral and death arrangements.

Special needs trusts provide for the needs of disabled people without creating a situation in which the disabled person loses government benefits such as Social Security and Medicaid. Special needs trusts appoint a trustee, just like any other trust, to be in charge of making sure everything goes correctly as stated in the trust.

LucyThe World institute on Disability has also helped to clarify a concern of many people who have a disabled family member. The government says that disabled people who receive government benefits cannot have trusts, however, a special needs trust does not belong to the special needs person.

The special needs person is only nominated as a beneficiary of the trust by the trustee, who establishes and administers the trust.

There are three types of special needs trusts:

Family-Type Special Needs Trusts:

For this type of trust, the parents provide the money and sometime purchase life insurance that will be paid into the trust. A living trust allows the people named in the trust to access the money before the “owner” of the trust dies. This type of trust is also good if any other relative wishes to contribute. The trick, though, is that this money cannot be used for housing, food or clothing, which should be covered by Social Security and Medicaid as basic needs.

Court Ordered Special Needs Trust:

Special needs trusts may be ordered by the courts if a disabled person inherits money or receives a court settlement. This requires a special trust because the person actually owns the money. Only a parent or legal guardian of the disabled person can set up this type of trust.

The disabled person must be under the age of 65 and meet certain standards set by Social Security in terms of his or her disability for this trust.

Pooled Special Needs Trust:

The third type of trust must be created by a non-profit association and can be added to by anyone, including the disabled person for whom the trust is set up. This is a large trust for many people, but each disabled person has his or her own account.

This may also be a simpler way to go, because the non-profit organization that sets it up does all of the necessary tax work, takes care of investment decisions, and functions as the trustee.

If you have a disabled family member and you are thinking of helping him or her to create a trust, consider speaking with an estate planning attorney for help. Attorneys at Stock, Carlson, Flynn & McGrath, LLC can help you set up a special needs trust today.