Families in Illinois with members who have disabilities often wonder what will happen to their loved ones after they pass away. Will they have a trusted caretaker at their side to help with daily tasks? Who will ensure their finances are protected? Will they be able to live comfortably and receive the care they need?
The concerns and questions can seem endless. It’s normal to worry about what might happen to your loved ones when you’re no longer around. The stress can feel overwhelming and leave you fretting about the future.
Fortunately, there is a way to protect your most vulnerable family members. A Special Needs Trust, or SNT, allows you to put money aside for disabled individuals. This solution is also known as a disability trust or supplemental needs trust.
So, what are the benefits of a Special Needs Trust, and how does it function? Continue reading to learn more.
What Is a Special Needs Trust?
A Special Needs Trust provides financial support to a disabled beneficiary without jeopardizing their eligibility for government assistance, like medicaid or Supplemental Security Income. The trust is specifically designed to support the beneficiary’s needs, enhance their quality of life, and cover additional expenses that might arise. But what can a Special Needs Trust pay for?
Typically, a SNT can cover costs that federal assistance won’t cover. This may include such things as personal care attendants, education, recreation, and even transportation.
Types of Trusts
There are three primary types of Special Needs Trusts, including:
- Self-Settled Special Needs Trust
For individuals under 65 with disabilities, they can benefit from a self-settled SNT. It’s created by a parent, grandparent, or legal guardian using the disabled individual’s assets. After the beneficiary’s death, any remaining funds first settle Medicaid claims before being distributed as per the trust’s terms.
- Third Party Special Needs Trust
Anyone can set up this type of trust for a beneficiary with disabilities using their own assets. Unlike the self-settled trust, the remaining funds after the beneficiary’s death don’t revert to the state. The trust settlor receives the remaining funds.
- Pooled Trust
Suitable for disabled individuals of any age, this trust is set up with money or property that belongs to the person with a disability. It can be started by the individual’s parents, grandparents, legal guardian, or by the disabled individual themselves. A non-profit organization manages the trust for investment purposes. Each beneficiary maintains an individual account within the pooled trust.
Benefits of a Special Needs Trust
The benefits of a Special Needs Trust are substantial. They offer financial security to disabled individuals without affecting their eligibility for state benefits. Moreover, they provide peace of mind to family members. It’s an incredible relief to know that you’re able to meet all your loved one’s needs even after death.
Choosing the Right Special Needs Trust Attorney in Illinois
Deciding on the right type of Special Needs Trust in Illinois can be difficult. It requires a thorough understanding of the specific needs of the beneficiary, the family’s financial situation, and Illinois’ Special Needs Trust rules.
A qualified SNT attorney can offer invaluable advice, ensuring that the trust is set up correctly and in compliance with all legal requirements. If you’re wondering how to set up a Special Needs Trust or considering this option, consult with our estate planning attorneys in Rockford, IL. We can help you pave the way for a secure future for your loved ones. Contact us today for a free initial consultation.
