Those who rely on government disability benefits can face the loss of those benefits if their income and assets become too great. This forces individuals to choose between the benefits of financial investments or getting regular needed disability benefits such as Supplemental Security Income and Medicaid. People in Florida may be wondering if there is a way to support both needs. A recent article telling about third-party special needs trusts gives more information on the subject.
A special needs trust is an account that is managed by a trustee who then disburses money to the beneficiary. The difference between a first-party and a third-party special needs trust is that the first-party trust is funded by the beneficiary, and the third-party trust is funded by another person. The third-party special needs trust addresses inheritance issues for persons with disabilities.
This type of trust comes with some benefits. When the beneficiary dies, the money does not have to be paid back to the government, unlike a first-party trust. Any remaining money can be passed to another family member or a beneficiary of their choice. Also, income taxes on the trust are generally paid by the donor, allowing the special needs person to avoid having to file income taxes.
It can take some creative planning to meet all one's financial needs if one is disabled. Some folks in Florida may be learning about a floridaelderlaw.net/Estate-Planning.shtml">special needs trust for the first time. An attorney can be a helpful tool if a disabled person or their family has questions about planning a trust for their financial needs.
Source: milestone.legalexaminer.com, "The Basics & Benefits Of Third-Party Special Needs Trusts", John Bair, June 12, 2017