Connecticut families with a special needs relative have a lot to consider when estate planning. One of the most pressing questions that families face is how their special needs child or younger relative be taken care of after their death.
A popular option for ensuring financial support exists for special needs relatives after their guardian’s death is a special needs trust. A special needs trust (sometimes referred to as a supplemental needs trust) can hold and protect financial assets for the future, with the special needs relative being the beneficiary.
How is a special needs trust set up?
The trust is set up using assets given to the special needs relative during their lifetime, life insurance policies, and other investments. Unlike traditional wills or inheritance, a trust can be set up to pay out a certain amount over a longer period of time.
The special needs trust also gives you more control over how the money is distributed. For example, you can add specific rules as to when someone can pull out more money from the trust.
What’s needed for a special needs trust?
You have the beneficiary set to your special needs relative, but depending on their capabilities, you’ll still need someone to help manage the trust. This is where a trustee comes into place.
A trustee makes decisions about how to administer the money from the trust and help the special needs relative navigate payouts. You’ll want to make sure the person you pick is trustworthy and willing to serve as trustee.
What are some other things to take into consideration?
Many trusts are set up so that the special needs relative can still maintain their government aid while also having financial backing. How you set up your special needs trust will depend on the needs of your relative and the assets you’re putting into the trust.