Different estate planning strategies permit you to ensure a loved one with a physical or mental impairment will be taken care of when you are no longer able to provide for him or her. Keep reading for a full overview of Florida special needs trusts.
What is a Special Needs Trust? – Understanding the Concept
A trust is a legal arrangement in which you (trustor or settlor) transfers the ownership of certain assets to a trustee (fiduciary) for the benefit of designated beneficiaries. Depending on how the trust agreement is structured, it is possible to create a revocable or irrevocable trust.
A revocable trust permits you to modify, alter, or revoke the provisions in the trust agreement during your lifetime.
An irrevocable trust cannot be modified, altered, or revoked. Once signed into existence, it is not possible to change the provisions in the trust agreement, such as changing the trustee, adding or removing beneficiaries, etc.
Upon your passing, a revocable trust automatically becomes irrevocable, and the trustee must handle the trust assets according to the provisions in the trust agreement.
A special needs trust is a trust created to ensure that a beneficiary with special needs will receive income without hindering their eligibility for public benefits associated with their condition.
Similar to any other trust, a trustee must hold the title of the trustor’s assets for the benefit of the impaired/disabled person. The trustee owes a fiduciary duty to the beneficiary, acting only according to the terms defined by the trustor.
Florida Special Needs Trusts – Why Is it a Valuable Solution for Individuals With Special Needs?
It is not unusual to find individuals with special needs that depend on public benefits for their health care and other personal needs. The eligibility for certain public benefits is affected by inheritance.
If an individual with special needs receives an inheritance from a wealthy relative, it could immediately disqualify that person from receiving public benefits. The costs associated with health care and other personal needs may be overwhelming for these individuals, draining a large part of the obtained resources.
With a special needs trust, it is possible to ensure a loved one with special needs will have access to services that are not covered by public benefits, including:
- Private education
- Emergency care
- Additional health care
- Additional dental care
- Additional medical equipment
Florida Special Needs Trusts – Taking a Closer Look
First-Party Special Needs Trusts
A first-party special needs trust can be created by the beneficiary (the individual with special needs), a close relative, or the beneficiary’s guardian. In this type of trust, the beneficiary funds the trust with his or her personal assets.
Structured as irrevocable trusts, the assets held in this type of trust can be used exclusively for the beneficiary’s benefit. Individuals concerned about future disability or individuals with special needs who expect to receive a large inheritance may benefit from this type of arrangement.
Third-Party Special Needs Trusts
A third-party special needs trust is created by anyone other than the beneficiary to provide care for the beneficiary’s special needs. Depending on the trustor’s purpose and goals, this type of trust can be structured as a revocable or an irrevocable trust.
Different from first-party special needs trusts, this type of trust does not require the payment of any remaining amount back to the government after the beneficiary’s death.
Do You Want to Create a Special Needs Trust in Florida? – Contact Attorney Romy B. Jurado Today
Waste no time with uncertainty – get in touch with Attorney Romy B. Jurado by calling (305) 921-0976 or emailing [email protected] to schedule a consultation.
