 People with Disabilities Will Soon Be Able to Create Their Own Special Needs Trusts
The ability to create a special needs trust is a critical step for individuals with disabilities and their families in securing their financial future. However, until recently, the process of creating such trusts has been fraught with complications and expenses. But that is about to change. Thanks to new legislation signed into law late last year, people with disabilities will soon be able to create their own special needs trusts, without having to rely on a third party to do it for them. This is a major victory for those with disabilities, as it empowers them to take control of their finances and ensures that they have the resources they need to live a happy and fulfilling life. In this article, we'll take a closer look at what special needs trusts are, why they are so important, and what this new legislation means for people with disabilities and their families. What are the benefits of creating a Special Needs Trust? A Special Needs Trust (SNT) is a legal arrangement that allows individuals with disabilities to receive financial support without jeopardizing their eligibility for government benefits. These benefits include Supplemental Security Income (SSI), Medicaid, and others. One of the main benefits of creating an SNT is that it allows individuals with disabilities to use their assets to pay for expenses that are not covered by government benefits. For example, an SNT can be used to pay for medical expenses, education, transportation, and other costs that are not covered by government benefits. Another benefit of creating an SNT is that it provides peace of mind for both the individual with disabilities and their family members. By creating an SNT, individuals with disabilities can ensure that their financial assets will be managed in a way that is consistent with their wishes. They can also choose a trustee who will manage the funds in the SNT and make sure that they are used for the benefit of the individual with disabilities. Finally, creating an SNT can help individuals with disabilities and their families avoid the costly and time-consuming process of going to court to establish a guardianship. A guardianship is a legal arrangement in which a court appoints a guardian to manage the finances of an individual with disabilities. By creating an SNT, individuals with disabilities can avoid the need for a guardianship and maintain more control over their financial assets. The Importance of SNTs for People with Disabilities SNTs are important for individuals with disabilities because they provide a way to ensure that they have the financial resources they need to live a fulfilling life. Without an SNT, individuals with disabilities may be forced to rely solely on government benefits, which may not cover all of their expenses. This can make it difficult for them to live independently and pursue their goals and dreams. In addition, without an SNT, individuals with disabilities may be at risk of losing their government benefits if they receive a large sum of money, such as an inheritance or settlement from a lawsuit. This is because government benefits are typically means-tested, which means that individuals must have a certain level of income and assets to be eligible for them. By creating an SNT, individuals with disabilities can receive financial support without jeopardizing their eligibility for government benefits. Finally, SNTs are important for individuals with disabilities because they provide a way to ensure that their financial assets are managed in a way that is consistent with their wishes. By choosing a trustee to manage the funds in the SNT, individuals with disabilities can ensure that their assets are used to meet their specific needs and goals. What is the Able Act? The Achieving a Better Life Experience (ABLE) Act is a federal law that was signed into law in December 2014. The purpose of the ABLE Act is to provide individuals with disabilities and their families with a way to save and invest money without jeopardizing their eligibility for government benefits. The ABLE Act allows individuals with disabilities to create tax-free savings accounts, similar to 529 college savings plans, that can be used to pay for a wide range of expenses related to their disability. The ABLE Act is an important piece of legislation because it provides individuals with disabilities with greater financial independence and control over their lives. With an ABLE account, individuals with disabilities can save and invest money for their future without fear of losing their government benefits. This can help them to achieve their goals and live a more fulfilling life. How the Able Act Makes It Easier for People with Disabilities to Create an SNT One of the most significant provisions of the ABLE Act is that it allows individuals with disabilities to create their own SNTs. Prior to the passage of the ABLE Act, individuals with disabilities had to rely on a third party to create an SNT for them. This could be a costly and time-consuming process, and it often resulted in individuals with disabilities having less control over their financial assets. With the ABLE Act, individuals with disabilities can create their own SNTs, which gives them greater control over their financial assets and greater flexibility in how they use those assets. The ABLE Act also allows individuals with disabilities to contribute up to $15,000 per year to their ABLE account (as of 2021), which can be used to pay for a wide range of expenses related to their disability. Steps to Create a Special Needs Trust Creating a Special Needs Trust (SNT) can be a complex and time-consuming process, but it is an important step for individuals with disabilities and their families to take. Here are some steps to follow when creating an SNT:
Differences Between First-Party and Third-Party Special Needs Trusts As mentioned earlier, there are two main types of Special Needs Trusts (SNTs): first-party and third-party. The main difference between these two types of trusts is the source of the funds used to fund the trust. First-party SNTs are funded with the assets of the individual with disabilities. These assets can include a settlement from a lawsuit, an inheritance, or other funds that belong to the individual with disabilities. The funds in a first-party SNT are typically used to pay for expenses related to the individual's disability that are not covered by government benefits. Third-party SNTs, on the other hand, are funded with the assets of someone other than the individual with disabilities. These assets can include a gift from a family member, a life insurance policy, or other funds that do not belong to the individual with disabilities. The funds in a third-party SNT are typically used to pay for expenses related to the individual's disability that are not covered by government benefits. Eligibility Requirements for Creating a Special Needs Trust In order to create a Special Needs Trust (SNT), the individual with disabilities must meet certain eligibility requirements. These requirements vary depending on the type of SNT being created. For a first-party SNT, the individual with disabilities must be under the age of 65 and must have a disability that meets the criteria set forth by the Social Security Administration. The funds in a first-party SNT must also be used for the benefit of the individual with disabilities. For a third-party SNT, there are no age or disability requirements. However, the funds in a third-party SNT must also be used for the benefit of the individual with disabilities. How to Choose a Trustee for Your Special Needs Trust Choosing a trustee for your Special Needs Trust (SNT) is an important decision that should not be taken lightly. The trustee is responsible for managing the funds in the SNT and ensuring that they are used for the benefit of the individual with disabilities. Here are some factors to consider when choosing a trustee:
Conclusion The ability to create a Special Needs Trust (SNT) is a critical step for individuals with disabilities and their families in securing their financial future. Thanks to new legislation signed into law late last year, people with disabilities will soon be able to create their own SNTs, without having to rely on a third party to do it for them. This is a major victory for those with disabilities, as it empowers them to take control of their finances and ensures that they have the resources they need to live a happy and fulfilling life. SNTs are important for individuals with disabilities because they provide a way to ensure that they have the financial resources they need to live a fulfilling life. Without an SNT, individuals with disabilities may be forced to rely solely on government benefits, which may not cover all of their expenses. This can make it difficult for them to live independently and pursue their goals and dreams. Creating an SNT can be a complex and time-consuming process, but it is an important step for individuals with disabilities and their families to take. By following the steps outlined in this article and working with an experienced attorney and trustee, individuals with disabilities can ensure that their financial assets are managed in a way that meets their specific needs and goals. -------------------- If/When You Need a Eulogy Someday, it's inevitable that you'll find yourself needing a eulogy written for a loved one. This can be an overwhelming and emotional task, especially during a time of grief. That's where a professional eulogy writer comes in. They can help take the burden off your shoulders and craft a beautiful tribute to your loved one. When searching for a eulogy writer, look no further than TheEulogyWriters.com. Their team of experienced writers understands the importance of capturing the essence of the person being honored in the eulogy. They can work with you to gather information and memories, and then use their expertise to craft a heartfelt and meaningful eulogy. With TheEulogyWriters.com, you can trust that your loved one's legacy will be celebrated and remembered in the most beautiful way possible. Don't let the stress of writing a eulogy add to the weight of your loss. Allow TheEulogyWriters.com to help you honor your loved one with a touching and memorable tribute. Comments are closed.
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