A child or grandchild with special needs is someone who might benefit from the structure and the wealth preservation offered by a trust in Florida. These trusts can be specially designated and designed to protect them and their well-being without blocking them off from also receiving benefits from Social Security and other sources.
Special needs trusts
There are two categories of special needs trusts. A self-settled trust uses assets that the disabled person owns, and a third-party trust is one that an outside person like a family member sets up and funds for the disabled person. Both have complex requirements legally to avoid interfering with government benefit programs.
For example, a third-party trust cannot be used to pay for living expenses like bills, but it can be used to purchase or pass down a house to live in. A self-settled trust contains assets that the disabled person owns, but they cannot access the funds themselves– only the appointed trustee can do that.
The two categories are different ways to allow a disabled person to enhance their quality of life. Keeping track of the various restrictions is a challenge, but once the trust is up and running, the trustee can take care of managing both the rules and the assets.
Special needs trusts are more constrained than a regular trust, but they are also an excellent way to transfer wealth without interfering with government benefits. Since the value of those benefits can be very large, it is worth going the extra mile to have a properly set up special needs trust to manage wealth and income over the lifetime of the individual.