Special-needs individuals fortunate enough to have a parent or family member care for them often face trying times, emotionally, physically and financially, when the caregiver passes.
Fortunately, special-needs planning can ease some of these difficulties. Here are some vital things to know about special-needs planning in Kentucky.
What is a special-needs trust?
A special-needs trust is a tool for securing the assets a special-needs beneficiary will need for living expenses and care costs after a primary caregiver passes. Because the property placed in the trust does not directly belong to the beneficiary, it will not affect their eligibility for financially based government assistance.
What beneficiary factors need consideration?
When creating a special-needs trust, several factors warrant consideration, including the beneficiary’s:
- Care requirements
- Income and financial needs
- Need for help to manage affairs
Each situation is unique and requires knowledgeable guidance to create a plan that adequately provides for the beneficiary.
What kinds of special-needs trusts are there?
There are three types of special-needs trusts. A first-party special-needs trust protects a beneficiary’s money, such as large sums from a lawsuit, insurance payout or inheritance. Third-party special-needs trusts safeguard money that transfers from a grantor to the beneficiary. Pooled trusts employ the assistance of a non-profit organization to manage assets for a special-needs person in place of a designated trustee.
A thoroughly organized special-needs trust is a powerful tool to help provide for individuals who require a heightened level of care or need help managing their affairs after a primary caregiver passes.