Third-Party Special Needs Trust

If you want to provide for the future care of a loved one with special needs, one of the most effective ways to do so is to create a Third-Party Special Needs Trust, also referred to as a Supplemental Needs Trust. If the trust is set up correctly, your loved one can still receive critical public benefits such as NC Medicaid and Supplemental Security Income.

At Brady Cobin Law Group, PLLC, we can develop a Third-Party Special Needs Trust to fulfill your specific objectives. A trust can be incorporated into your will or set up independently so that it can provide benefits during your lifetime.

How a Trust Works

Many people think of a trust as a type of account, but it is actually a legal arrangement for property ownership and management. A trust might hold several accounts, real estate, and other assets. You can think of it as a container for holding property.

The person who puts property into the trust is the grantor. In a Third-Party Special Needs Trust, the grantor may be a parent or other family member. The individual with special needs who receives proceeds from the trust is the beneficiary. The person who manages the property held by the trust is known as the trustee. The trustee has a fiduciary duty to manage trust assets for the good of the beneficiary, and they can be held accountable if they fail to fulfill that duty.

A Third-Party Special Needs Trust Must Be Irrevocable

Trusts are set up to be either revocable, meaning that the person who set up the trust can change or revoke it, or irrevocable, so that the person who donated property into the trust cannot get it back or change the terms of the trust., A Third-Party Special Needs Trust can be set up as revocable or irrevocable.   Like a First-Party Special Needs Trust, the trust, rather than the beneficiary, owns the property; therefore, the trust property is not counted against the beneficiary for government benefits.

It is important to work with a knowledgeable attorney when preparing trust documents and to follow any applicable guidelines regarding use of funds. If a special needs individual is in line to receive property through an inheritance, the wording should be set up to bequeath the property to a trust rather than to the individual directly.

NC Medicaid Does Not Have a Claim on Remaining Funds in a Third-Party Special Needs Trust

In a First-Party Special Needs Trust, any funds remaining in the trust after the beneficiary passes away may need to go to NC Medicaid to reimburse benefit payments made during the beneficiary’s lifetime; however, because money in a Third-Party Trust never belonged to the beneficiary, any funds left after the death of the beneficiary can be distributed to other family members, a charity, or anyone chosen by the grantor.

Work with an Experienced Trust Attorney to Protected Your Loved One with a Third-Party Special Needs Trust

When you work with a knowledgeable trust attorney to establish a Third-Party Special Needs Trust, you can feel confident that you are taking the right steps to provide for the future needs of your loved one. At Brady Cobin Law Group, PLLC, we understand the specialized requirements for these trusts and we can develop a trust that meets Federal and state rules while providing care in accordance with your wishes. Contact us today for a consultation to learn more about how a Third-Party Special Needs Trust will enable your family to face the future with confidence.

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Our North Carolina estate planning and elder law attorneys are committed to honoring the life, work and charity of every individual. Call us at (919) 782-3500 or complete the form below.

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