“Hello! We would like to create a Special Needs Trust for our granddaughter who has Autism. Is this something you could help us create?” We receive this question often. 

Attorney Clark recently gave a presentation at the Maryland School for the Deaf on this exact topic. 

If you have a family member with special needs, you understand that their care could be now or in the future supported through state and federal disability assistance services.

However, eligibility for these services is often determined by the individual’s income. Leaving money directly to the individual could lead to them having to pay for the assistance out of pocket. Under the majority of circumstances and unless your child won a medical malpractice settlement, the Special Needs Trust (“SNT”) is not set up right away. 

SNTs are often taxed at a higher tax bracket, require a separate tax ID number, and require the trust to be funded right away. The State of Maryland, for example, also needs to approve such trusts and will require certain reporting accountings for funds in the trust. The best you can do while you are still living is to direct that money be set to go into an SNT, but it will not be set up until you pass. 

“How do you avoid the unnecessary red tape and still provide for my loved one?”

As long as you are alive, you can provide and take care of your own grandchild. You will also need money for your own retirement. You should consult a Wills and Trusts attorney, like us, who has substantial experience establishing SNTs to discuss your options. 

“In that case, I don’t need any planning now, and instead direct my Executor to get that Special Trust after I die? “

Incorrect. Failing to establish the trust provisions now will mean that your estate will have to go through a probate. Then, even if your Executor immediately puts money in a newly-created Special Needs Trust, there will still be a time period where assets were accessible to your grandchild. That is enough for her to lose the disability benefits.

“I have life insurance that I want my child’s SNT to receive, so I need this trust now.” 

That’s not how it works. Your Trustee won’t receive insurance proceeds until after you die, so there is nothing to put into the trust right now.

Please call us at 301-696-0567 or self-schedule at lenaclarklegal.com if you would like help protecting your assets and loved ones in the event of death or disability.

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