Special Needs Trust Lawyers in Lenoir County

Protecting Your Vulnerable Loved Ones

Special needs trust go by a couple of other popular names, such as a supplemental needs trust as well as SNT.

People with special needs often rely on government-provided assistance programs. This can be North Carolina’s Food and Nutrition Services, also known as food stamps, Temporary Assistance for Needy Families, also known as TANF, or any other government services designed to help those in need.

The problem with these programs is that they require the receiver of said benefits to qualify, usually with income at or below a certain threshold. In North Carolina, to be eligible for the Food Stamps program, a person who lives alone and does not prepare and eat meals with others must earn less than $29,160 before taxes. That is only $2,430 per month. The threshold for earned income does increase if that same person lives in a household containing more than just themselves, as long as that household cooks and prepares meals together.

The problem with these thresholds is that they include any financial benefits family, friends, or anyone else gift them. This means that if you have a loved one that you care for, that you provide for, and pay for their needs, from their food needs to their medical needs, you may cause them to “earn” more than what is acceptable, knocking them off of their benefits.

A Special Needs Trust is one workaround that you can use to care for your loved one while also ensuring their access to often time crucial government benefits.

A Special Needs Trust allows you to allocate funds and assets to a trust. These funds and assets are distributed to the person in need. By using a Special Needs Trust, any financial assistance that is given to the person with special needs will not count towards their own personal income. This allows you to care for the ones you love while they remain eligible for government-supported assistance.

What Kinds of Special Needs Trusts Are There?

There are a few different kinds of special needs trusts. These variations all act in a similar way, allowing someone to deposit funds into the trust and for the beneficiary, often the person with special needs, to withdraw and use the funds.

Third-Party Special Needs Trust

A third-party special needs trust closely resembles a traditional trust. It is funded by someone who is not the beneficiary, allowing the beneficiary to withdraw and use the funds as needed.

A stand-alone trust allows the beneficiary to access the assets while the grantor, the person who is funding the trust fund, is alive. The grantor would need to create a testamentary trust that is tied to their will if they would like benefits to continue after they pass.

First-Party Special Needs Trust

A first-party special needs trust is funded by the beneficiary. A mentally able individual may set and fund their own special needs trust in an effort to protect their government assistance. Someone close to the beneficiary may also set up this type of trust, using the beneficiary’s assets to fund it.

Setting up a first-party special needs trust requires a Medicaid repayment provision. This provision means that after the beneficiary passes away, any remaining assets in the trust will be used to repay Medicaid before being distributed to contingent beneficiaries.

Pooled Special Needs Trust

A pooled special needs trust is also called a community trust. Nonprofit organizations usually administer them. Multiple families, donors, and community members can fund the trust. Individuals within the trust are named as separate beneficiaries.

What Can the Beneficiary Use Trust Funds For?

The beneficiary may use the funds in their trust to pay for anything. The main caveat is that certain expenditures will not affect the beneficiary’s ability to collect government benefits, while other expenses can affect their benefits.

If the beneficiary spends their trust on things like rent or mortgage, it can potentially reduce their benefits. This is also true for HOA dues, insurance, utilities, vacation lodging, groceries, and frequent restaurant meals. If a beneficiary receives cash directly from the trust, it can impact their benefits.

How Can a Special Needs Trust Lawyer Help You?

While it is possible to set up and manage a special needs trust without the assistance of an attorney, an attorney can help ensure that you and your loved one are protected to the fullest extent of the law.

They will help you navigate this process step-by-step.

The first two steps of creating a special needs trust are relatively easy. You must name the beneficiary, your loved one with special needs. Then, you must choose a trustee. A trustee can be anyone other than the beneficiary. You can name yourself as the trustee. The trustee is the person who manages the trust.

Next, you will write and sign your trust documents. This is where the team at Swindell Law Firm, PC, can help ensure you and your beneficiary are protected. The compassionate attorneys at Swindell Law Firm, PC, can ensure you follow the necessary guidelines and rules required in creating a trust.

The next step is to fund the special needs trust. The trust can be funded with cash, personal items, real estate, investments, and anything else.

Call the law office of Swindell Law Firm, PC, at 252-262-1325 to speak with our talented team and to schedule your free 15-minute strategy meeting. Don’t leave the care of your loved one up to chance. Call now!