Looking after your loved ones is a rewarding process. The reward multiplies when you have disabled people at home. Despite financial and physical constraints, taking care of disabled loved ones is every citizen’s moral and social responsibility. If you live in Houston, TX, and want to establish a special needs trust (SNT) for your loved ones with disabilities, an estate planning lawyer can help you achieve this goal. Let’s dive into the key steps involved in the process for a thorough understanding.
When creating a special needs trust for your disabled loved ones, you may consider several factors to carry out the process successfully. We have covered the primary steps below to get you started.
Understanding the purpose of a special needs trust is crucial. An SNT supplements government benefits like medical aid, supplemental security income, and other offerings to disabled people. Once you are familiar with the concept, you can better prepare for a special needs trust.
SNTs are generally categorized into two main types: third-party SNTs and first-party SNTs. A third-party SNT is funded with the assets of someone other than the disabled individual (a parent or relative). The donor specifies how the funds should be used for the benefit of a disabled person.
A first-party SNT gets the funding from the assets of a disabled individual, typically through an inheritance, personal funds, or lawsuit settlements. This type must cover a Medicaid payback provision.
A trustee is a person or entity that is responsible for managing and disbursing funds according to the terms of the trust. Once you decide on the SNT type with the guidance of your estate planning lawyer, you can select a trustee to proceed further.
Consulting an estate planning lawyer at this stage may help you draft the trust document in compliance with federal and Texas state laws. An attorney can also guide you on the best practices to establish a special needs trust for your loved ones with disabilities.
With the help of your special needs attorney, draft the trust document by specifying the terms and conditions. You may also fund the trust with the appropriate assets, including cash, investments, life insurance, or real estate, based on your preferences.
After establishing the special needs trust, you may clearly state the terms of distribution among the beneficiaries while keeping the trustee in the loop. Clear communication prevents confusion and conflict in the long run and ensures that each beneficiary gets equal funding from the trust.
The above details highlight the core steps involved in establishing a special needs trust (SNT). If you need an estate planning lawyer that addresses all your concerns, West Loop Law can meet your demands. Get in touch with us today to discuss your case.