Special Needs Trust Texas

First Party Special Needs Trust

People who are worried about what will happen to their special needs child or spouse when they are no longer around to take care of them, should consider creating a special needs trust. Being concerned about your loved one’s care is justifiable because many special needs children need constant care, which can be both time consuming and expensive. People caring for a spouse with dementia or Alzheimer’s also have these concerns. An experienced special needs lawyer in Texas can help you create a special needs trust that will allow your loved one to inherit your assets without losing government benefits.

What Is A Special Needs Trust

A special needs trust is a trust that discreetly holds the property of a special needs loved one and directs distributions so as to preserve your loved one’s eligibility for government benefits. These government benefits include Supplemental Security Income, and Medicaid. Creating a special needs trust becomes extremely necessary if you know you will leave behind significant assets to your special needs husband or child after you die.

That is assets that are more than the $2,000 limit for qualifying for SSI and Medicaid. In other words, the trust protects your loved one from having to pay for treatment, medication and other healthcare needs out of pocket. Without a special needs trust, your loved one’s financial future may be jeopardized.

Creating A First Party Trust

Special Needs Trust TexasYou have two options if you are thinking of starting a trust for your special needs loved one. You can create a first-party special needs trust if your loved one has assets in their own name. This can be assets such as an inheritance, a legal settlement or an insurance payout. A first-party trust makes it so that your special needs loved one does not have direct access to the money and assets. Since they don’t have direct access, they retain their eligibility for government benefits. If the beneficiary of the trust dies, the remaining amount in the first-party trust must be used to pay back Medicaid for benefits paid by Medicaid to the beneficiary.

Creating A Third Party Trust

Another type of special needs trust is the third-party trust which can be created by anyone. The person creating the trust can do so when they are alive or through a will after their death. This kind of trust is usually funded through donations from family and friends. Since the inheritance of the person with special needs is passed into the trust, records will show that the property belongs to the trust and the special needs person is the beneficiary of that trust. That means that the special needs person does not directly own the property and for that reason is eligible for government benefits.

You need a trustee to oversee the distribution of funds from the special needs trust after your death. Fortunately, the trustee can be a family member, private professional or friend. Your lawyer will help you ensure that the trust you create for your special needs child or spouse is drafted and funded carefully.

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