A common strategy parents of children with special needs take is creating a special needs trust (SNT), also known as a supplemental needs trust, to ensure that the child’s needs, on top of basic ones, are continuously provided for in the event something happens to the parents. And sometimes, other people involved in the beneficiary’s life want to extend a hand and contribute to the fund. Fortunately, this is possible with SNTs.
A third-party SNT allows multiple donors
One type of SNT, the third-party SNT, can receive funds from other people aside from the grantor of the SNT, which is usually the parents. Grandparents, relatives, friends and other involved individuals can fund the trust with various assets, such as real and personal property, stocks and bonds, investments and similar properties.
When can the SNT receive funds?
The trust can receive funds at any time upon establishment and during the trust grantor’s lifetime. It is also possible for donors to fund the trust in the future by including provisions of such in a will or trust or designating the SNT as a life insurance beneficiary.
Ensure that the provisions are clear
Establishing an SNT for your loved one with special needs can give you the assurance that they will have enough resources to live and grow. Moreover, having multiple people reach out and contribute to the trust can give you peace of mind that the trust assets can cover your child’s needs. It is, however, vital that the provisions of the SNT clearly state that the trust assets are merely a supplement to government benefits awards to avoid disqualification. Careful planning and trust drafting will help you achieve this goal.