How to care for an incapacitated family member throughout his or her lifetime is an issue that concerns many people. If you have an incapacitated family member receiving Medicaid or SSI, you should consider setting up a special needs trust. A special needs trust is administered by a trustee for the benefit of the incapacitated individual.
Here is a very brief overview of special needs trusts. There are several kinds of special needs trusts. First party special needs trusts and pooled special needs trusts are funded with the beneficiary’s own assets or pooled assets from several beneficiaries. Because the funds are the property of the beneficiary or beneficiaries, first party trusts contain payback provisions ensuring that any funds remaining after the death of the beneficiary reimburse the government for government benefits received by the beneficiary during his or her lifetime.
Third party trusts are funded with funds that do not belong to the beneficiary and do not need to be paid back to the government after the beneficiary’s death. The grantor of the trust may designate that remaining funds go to another individual or entity after the beneficiary’s death. An individual special needs trusts must be created before the beneficiary reaches the age of 65. For more information about these trusts, contact Brockmann Law for a consultation.