Setting Up Your Specialty Needs Trusts Correctly
Medicaid and Social Security benefits are available for people who need financial assistance. However, in order to be considered “in need,” a person must have less than $2,000 in assets. A special-needs individual who receives an inheritance from a well-meaning parent or grandparent could be disqualified from receiving benefits.
With effective special-needs planning, you can take comfort knowing you have performed a thorough investigation and planted measures to protect your assets and the financial well-being of your loved one. An experienced Dallas third-party, self-settled and pooled trusts lawyer can help you protect the best interests of your family members. Livens & Reed, PLLC helps individuals throughout the Dallas-Fort Worth Metroplex create the most effective special-needs trusts.
Determining The Best Trust For Your Needs
Generally, with a trust, one person — the trustee — is tasked with managing property contained within the trust. The property is managed by the trustee for the benefit of another party — the beneficiary. The trust agreement outlines how the trustee must spend the trust funds on behalf of the beneficiary, including how and when the trust income and principal are distributed. At Livens & Reed, PLLC, we help individuals create trusts, including:
- Third-party trusts: With a third-party trust, one person creates funds for the benefit of someone else. Third-party trusts are created for a parent who has a special-needs child, or one spouse whose spouse is disabled.
- Self-settled trusts: Self-settled trusts are also referred to as first-party special-needs trusts because the beneficiary creates the trust for him or herself with his own money. These trusts are used for individuals who are disabled, who are coming into an inheritance or who are receiving proceeds from a personal injury or medical malpractice claim.
- Pooled trusts: In some situations, if the size of the trust is insufficient to justify hiring a professional trustee, a pooled trust can be used. Pooled trusts must be managed by a nonprofit association. Upon the beneficiary’s death, the state does not have to be repaid for its Medicaid expenses as long as the funds are retained in the trust.