If you have been concerned about the future for a loved one with special needs, you are not alone. This is a top concern for many families, but careful estate planning and the use of trusts can lay your worries to rest.
In Delaware, trusts offer the ability to provide financial support for your family member while preserving their eligibility for crucial government benefits. Here are three options to explore.
Special needs trust (SNT)
This trust provides for beneficiaries with disabilities. Funds in the trust can cover expenses like medical care, therapy, education and personal enrichment, without jeopardizing Medicaid and other government assistance.
Delaware recognizes these special needs trusts: First-party, which are funded with the beneficiary’s own assets, and third-party, which are established by relatives. The trustee manages funds and ensures that distributions comply with legal requirements, safeguarding the beneficiary’s financial well-being.
Pooled trust
This offers an alternative for families who want professional management at a lower cost. Managed by nonprofits, pooled trusts combine assets from multiple beneficiaries while maintaining separate accounts for each individual.
Families benefit from this knowledgeable oversight, knowing that allocated funds meet the beneficiary’s needs while adhering to Medicaid regulations.
Supplemental needs trust
Unlike a traditional SNT, this unique trust focuses on enhancing the beneficiary’s quality of life rather than covering basic expenses. Families can use it to fund items like entertainment, travel and specialized equipment. When combined with other estate planning tools, a supplemental needs trust can provide support beyond government aid without affecting the beneficiary’s eligibility for critical public benefits.
Setting up a trust requires careful legal planning to align with state regulations and the beneficiary’s unique circumstances. An experienced estate planning professional can offer invaluable support.
