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Special Needs Trusts Provide Security for Vulnerable Loved Ones

Trusts attorney in Bronx, New York offers reliable solutions

If you are caring for a special needs child or adult, there are ways you can provide financial support while still qualifying your loved one for government benefits. You can also put support structures in place for the future, so you won’t have to worry about what might happen should you pass away. At the Cormac McEnery Law Firm, we help caregivers by drafting custom trust plans that address their loved ones’ specific needs. For more than 35 years, we’ve provided personalized service for concerned clients looking for creative solutions to difficult situations. Attorney Cormac McEnery realizes there are no “one-size-fits-all” solutions. He listens and learns about your situation, then crafts a comprehensive plan that addresses your vital concerns.

How a special needs trust operates

A special needs trust (SNT) is essentially a spendthrift trust that holds assets for the support of a beneficiary, providing an income stream, but not allowing the beneficiary to access the principal. There are three general types of SNTs:

  • First party special needs trusts — This is a self-settled living trust, meaning that the beneficiary is the grantor. These trusts come about when a disabled person comes into money, through a personal injury claim or an inheritance, and accepting the amount in full would disqualify the person from government assistance. If your loved one is under 65 years of age and disabled as defined by the Social Security Act, this type of SNT may be appropriate. When the beneficiary passes away, trust funds must be used to repay Medicaid for benefits received during the beneficiary’s lifetime.
  • Pooled trusts — A disabled person who receives a modest personal injury settlement or inheritance may not find a first party SNT practical. But, he can place those assets in a pooled trust, which is managed and invested by a nonprofit corporation.
  • Third party supplemental needs trusts — Parents, relatives or friends fund this type of trust for the benefit of a disabled individual, usually with an intended inheritance. The trust shelters the inheritance, but parents can access funds to pay for ongoing expenses that government benefits do not cover. When the beneficiary dies, there is no Medicaid payback. The remainder of the trust assets goes to a beneficiary of the grantor’s choosing.

These trusts are part of the solution for disabled individuals, which should also include guardianships for persons who cannot be expected to manage finances or make decisions for their own health and welfare.

To explore how a special needs trust can benefit your loved one, contact our New York City law firm

A special needs trust can provide financial security for disabled individuals, but it must be crafted specifically to meet their needs. The Cormac McEnery Law Firm provides highly-personalized estate planning services. To schedule a free consultation at our City Island, Manhattan or Brooklyn Heights office, call us at 888.368.4329 or contact us online.