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As the parent or guardian of a person with a disability, you may have heard of a special needs trust. This type of trust can play an essential role in providing financial support for your loved one with special needs throughout their lifetime. If you're living in Illinois and wondering how a special needs trust can benefit your family, keep reading.
What Is a Special Needs Trust?
A special needs trust is a legal tool that provides financial assistance to a person with a disability, without causing them to lose eligibility for government benefits such as Supplemental Security Income (SSI) or Medicaid. The trust can be set up by a parent, grandparent, guardian, or court, and is managed by a trustee. The trustee is responsible for making distributions from the trust to cover the beneficiary's expenses, such as medical bills, home care, therapy, education, and other needs not covered by public benefits.
Why Should You Consider a Special Needs Trust?
Without a special needs trust, if you provide a sizeable inheritance to your loved one with disabilities, it could cause them to lose their eligibility for public benefits. Instead, with a special needs trust, you can ensure that your family member will continue receiving the government assistance they need while providing them with additional financial support. For example, the trust can help pay for a private tutor, a wheelchair-accessible van, or a down payment on a home, all without adversely impacting their eligibility for public benefits.
How to Set Up a Special Needs Trust in Illinois
To set up a special needs trust, you'll need the help of an experienced estate planning attorney who's knowledgeable about Illinois state laws. Special needs trusts can be structured in several ways, including first-party trusts, third-party trusts, pooled trusts, or testamentary trusts. The right type of trust for your family will depend on various factors, such as the age and health of the beneficiary, your financial situation, and your estate planning goals. An attorney can help you navigate all the legal requirements involved in creating and funding a special needs trust in compliance with state and federal law.
What Happens to the Special Needs Trust After You Pass Away?
One important aspect to consider when setting up a special needs trust is what happens to the trust when you're no longer around to manage it. You'll want to choose a trustee who will continue managing the trust according to your wishes and your loved one's best interests. You may also want to name a successor trustee in case the original trustee becomes unable or unwilling to fulfill their duties. Additionally, you'll need to name a remainder beneficiary who will receive any remaining trust funds after your loved one's death. This beneficiary should be selected with care, as they will receive whatever is leftover in the trust, if any, and could potentially impact your loved one's eligibility for government benefits.
If you have a family member with special needs in Illinois, a special needs trust can help you provide them with the financial support they need without jeopardizing their eligibility for government benefits. Working with an estate planning attorney who has experience with special needs trusts is the best way to ensure that you establish the right trust for your loved one and their unique circumstances. A special needs trust can offer you peace of mind knowing that your loved one's future financial needs are taken care of, even after you're gone.
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Disclaimer: The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
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