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What is a Special Needs Trust?

If you have a loved one who has special needs, then you may have heard about Special Needs Trusts (SNTs). Special Needs Trusts permit you to gift or bequest money to a loved one (via the Trust) without jeopardizing the person’s government benefits. The government benefit that is most notable is SSI. If you were to gift money outright to a person with special needs, then they would have to spend down that money and will temporarily lose eligibility for SSI until the money is spent. This is counterproductive and you may think that you should not leave any money to an individual with special needs at all. Instead, you can leave money in Trust to a special needs individual and restrict how the money is used, without jeopardizing government benefits.

Operation of a Special Needs Trust

With the assistance of a Wills and Trusts firm such as the firm of Johnston Tomei Lenczycki & Goldberg LLC you can create a Special Needs Trust for your special needs loved one. When you create the Trust you will name an individual other than the special needs individual to act as Trustee. This person has the discretion to distribute assets to your loved one in a manner that will not jeopardize benefits. We will specify in the Trust Agreement that the assets can only be used for certain categories of expenses, excluding food and shelter. Food and shelter is the domain of SSI, so the funds in a Special Needs Trust cannot be used for those categories. However, the Special Needs Trust can be used for supplemental healthcare, entertainment, and other life improvements. The Trustee has the discretion to distribute the money to your loved one for such items.

Things to Know Before Creating a Special Needs Trust

Special Needs Trusts are not necessary for many people. If you want to gift very little in the way of assets to an individual with special needs, first look at ABLE accounts to determine whether this may be more fitting. Special Needs Trusts are also not necessary for special needs individuals who do not rely on SSI (usually because they already have significant assets that cover their living expenses). It is also inadvisable to fund a Special Needs Trust if your funds are not sufficient enough to cover your retirement needs.

Contact a Special Needs Trust Attorney Today at Johnston Tomei Lenczycki & Goldberg LLC

If you wish to create a Special Needs Trust, do not hesitate to reach out to the Libertyville Trust attorneys at Johnston Tomei Lenczycki & Goldberg LLC today at (847) 596-7494. We will advise you as to whether such a Trust is a good option for you and the best way to proceed. We will draft the Trust and make sure it is in line with your wishes. If you have a loved one with special needs, now is the time to plan for his or her future. Contact us today to learn more.

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Johnston Tomei Lenczycki & Goldberg LLC

Phone Number: (847) 549-0600
Fax Number: (847) 589-2263

Libertyville Office
350 N. Milwaukee Ave., Ste. 202
Libertyville, IL 60048

Gurnee Office
223 N. IL. Rt. 21, Ste. 14
Gurnee, Illinois 60031

Manchester Office
2100 Manchester Road, Suite 920
Wheaton, IL 60187