How can families use special needs trusts?

On Behalf of | Feb 4, 2022 | Firm News |

Texas families can set up a special needs trust for an adult up to age 65 who has a diagnosed disability as defined by the Social Security Administration. You can establish an irrevocable or revocable trust as the person’s parent, legal guardian or grandparent.

Review the common uses for special needs trusts in Texas if you have a family member who cannot work because of a disability.

Supplemental needs

To be eligible for a special needs trust, your loved one must receive Supplemental Security Income benefits for his or her disability. SSI income must pay for the person’s basic needs, including housing, clothing and food. In contrast, money from a special needs trust can fund items not covered by SSI that would improve the person’s quality of life. Common examples include entertainment and travel expenses as well as:

  • Maintenance and improvements for the person’s home or car
  • Educational expenses
  • Monthly subscription fees for items such as phone, internet and cable service
  • Extra medical and dental needs
  • Recreational events
  • Payments for a companion as needed

Special needs trust management

You can fund the trust with a life insurance policy or estate assets. You must also name a trustee to manage the trust and disperse the money to your family member. You can choose a trusted friend or family member, or opt to hire a professional trustee.

Planning for the future when you have a child or family member with special needs can help you avoid unwanted tax and estate planning consequences. It also ensures a solid financial foundation for your loved one.