Special Needs Estate Planning
Lake Mary, Winter Park, Longwood, and Orlando, Florida Special Needs and Disability Planning Attorney
Special needs planning
involves establishing a trust to hold assets for the use and benefit of a
disabled person. There are several types
of special needs trusts (“SNT”) that can be utilized:
SNT. This trust is set up by a third party,
i.e. a parent, grandparent or other relative. The assets are still in estate of
grantor, and any assets of the disabled person on this trust will be
considered available resources.
SNT. Transfers to this kind of trust are a
current gift that do not qualify for the annual exclusion. Assets of the disabled person in this
type of trust will be considered available resources.
(d)(4)(A) Trust. This is a type of irrevocable trust set
up for a person who has or is about to receive assets that would
disqualify him from receiving public benefits. It can be established by a parent,
grandparent, legal guardian, or court using the assets of a disabled
person under the age of 65. The state
must be reimbursed from the trust at the disabled person’s death
(C)(2)(B)(iv) Trust. This is a trust created by a parent for
a disabled child or for a disabled person under 65. Transfers of the disabled person’s
assets to this trust are not considered disqualifying transfers by the
trustor for Medicaid purposes. The
distributions must be (a) actuarially sound and for the sole benefit of
the disabled person, or (b) that the state be reimbursed from the trust
corpus upon the disabled person’s death.
It should only be used where the trustor is otherwise eligible for
Medicaid. The initial trustee
should be someone other than the trustor to avoid Medicaid inclusion of
76-270 trust. This irrevocable trust is used as a
receptacle for unitrust income payments from a Charitable Remainder Trust.
Please contact us if
you are interested in learning more about special needs trusts.