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How a special needs trust can help an ill or disabled family member

Both Nevada and the federal government provide several financial assistance programs intended to help chronically disabled or ill persons meet their healthcare and living costs. Virtually all of these plans have income limits that control eligibility for each program. A special needs trust is an estate planning device that helps families with a member who would otherwise be eligible for these federal and state assistance programs set aside funds for the disabled person’s future care and living expenses.

What is a special needs trust?

A special needs trust is a trust established under the laws of Nevada. The trust can have only one beneficiary – the person who is disabled by illness or injury. The trust must be irrevocable, and the balance in the trust at the time that the beneficiary dies must be paid to the state or federal government to cover certain costs paid by the government assistance program. A special needs trust can be funded from the assets of the beneficiary, assets paid in by a third party such as a friend or relative, or the proceeds from a lawsuit arising out of the beneficiary’s injuries.

Who can serve as the trustee of a special needs trust?

Most special needs trustees are close friends or advisors, such as an attorney or accountant. Many institutions such as banks and financial planning firms provide professional trustee services who manage the trust’s assets for a fee. Choosing a trustee can be a very important task for the individuals who are setting up the trust.

Anyone who may be interested in establishing a special needs trust should speak to an experienced estate planning attorney for assistance in drafting the trust documents. A knowledgeable attorney can also assist in choosing a trustee.