Special Needs Trust
Definition - What does Special Needs Trust mean?
A special needs trust, also known as a supplemental needs trust, is a type of trust that is set up for a person who is disabled, whether physically or mentally. The purpose of such a trust is to allow the beneficiary to inherit and still be able to access public health care for their incapacity.
An executor would be established for this type of trust, and would be responsible for ensuring that the beneficiary received dividends from the trust or regular allocated payments from the trust.
In the context of the law, these trusts are legally binding, and they are also irrevocable. This means that they cannot be seized by creditors who are looking to collect on debts.
Justipedia explains Special Needs Trust
In most cases, a person's ability to receive health and medical help on a governmental level is dependent on their financial need, so if there is money to support private insurance, the person would not qualify. In cases where the person is incapacitated for the long term and needs a high level of ongoing care, the need arises to ensure that any inheritance does not cost the person their access to publicly funded medical help.
So, one of the main reasons why people often set up special needs trusts is so that a person with special needs can receive an income without becoming disqualified for receiving SSI benefits.
Parents of special needs children often set up these types of trusts to help the financial interests of their children.