What is a special needs trust? 6 Answers as of October 07, 2013

I am adopting a daughter who has Down Syndrome and I was told that I should set up a special needs trust so that she will be eligible for government programs. What is a special needs trust? I assume the adoption must be 100% complete before I set this up?

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Law Office of William Stoddard | William Stoddard
This is a trust where money can be put on deposit which is NOT the child's, but can be used for those things the child cannot pay for out of disability benefits. It is a trust, so once the money is deposited with a trustee (usually a bank) the trustee has to approve any withdrawals from said trust. Why this is important is that the IRS would otherwise claim this money is the child's and might tax it or it might go against the child when applying for disability benefits.
Answer Applies to: Washington
Replied: 10/7/2013
Peters Law, PLLC
Peters Law, PLLC | Mark T. Peters, Sr.
Typically, a special needs trust is something that you would set up in your will so that when you die, your estate goes into trust and is only allowed to pay for extras for your daughter, but not for her medical care. This prevents Medicaid from counting the trust assets as her property and going after the trust assets to reimburse Medicaid for the health care. I suggest talking with an estate planning attorney to work on this. I don't think you need to be the father to do this.
Answer Applies to: Idaho
Replied: 10/3/2013
John Russo | John Russo
It is what it says it is, it is a trust set up for the purpose of providing for an individual with special needs, it also has tax advantages.
Answer Applies to: Rhode Island
Replied: 10/3/2013
The Law Offices of Tres A. Porter | Tres A. Porter
You should consult with an experienced estate planning/probate attorney such as myself in your area as soon as possible. Basically, a special needs trust is a trust that allows you to put funds away to help meet the persons needs without endangering that person's eligibility for government programs, many of which have income or asset limits.
Answer Applies to: California
Replied: 10/3/2013
Law Offices of Helene Ellenbogen, P.S.H | Helene Ellenbogen
A special needs trust is a trust for a disabled person that is set up in such a way that the beneficiary can never get anything from the trust that would take away or reduce public benefits (e.g. social security) to which the person would otherwise be entitled. When the beneficiary dies, the state can pay itself back for the support/benefits it provided, but everything that may be left in the trust can go to someone else. You can set the trust up at any time that you have written a will that gives the beneficiary an inheritance unless you plan to fund the special needs trust immediately in which case you can set it up and fund it as soon as it's written. If this is a young child, I recommend the will and not funding anything now since you would be supporting her now as a child.
Answer Applies to: Washington
Replied: 10/3/2013
    Gottlieb & Goren, P.C.
    Gottlieb & Goren, P.C. | Aaron W. Goren
    A special needs trust will take care of your daughter after your death based upon the assets you allocate for her.
    Answer Applies to: Michigan
    Replied: 10/3/2013
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