When it comes to special needs planning, review all of your options and make sure you identify the most practical solution for your disabled loved one. Many people have familiarity with special needs trusts and supplemental trusts, but it is important to review disability trusts and what this term means with respect to estate planning. Everyone with special needs is in a unique position and some situations warrant a unique approach.
If a disability trust is the right move for your loved one, this could help safeguard their financial well-being throughout the course of their life and alleviate some of the anxiety that you and your loved ones have.
What are disability trusts?
According to the Colorado Department of Health Care Policy and Financing, disability trusts benefit disabled beneficiaries and differ from other types of trusts. Unlike third-party trusts, which use the funds of other individuals such as parents, disability trusts involve the use of a client’s own assets. For example, many disability trusts receive funding through a client’s personal injury settlement.
What should families consider when setting up disability trusts?
If you have uncertainty regarding disability trusts, carefully go over the ins and outs of this strategy and all of your options. For example, review the payback requirement, which stipulates that trustees must remit the balance of a trust after the termination of the trust or the beneficiary’s death. Discuss these issues with your family members and try to remain calm. Think about your loved one’s future and make sure that you have pinpointed the most appropriate course of action before moving forward.