What type of trust is a special needs trust?
It is a type of irrevocable trust that, according to the California Department of Healthcare Services, “allows for a disabled person to maintain his or her eligibility for public assistance benefits, despite having assets that would otherwise make the person ineligible for those benefits.”
How does a look through trust work?
This is an irrevocable trust where the surviving spouse manages assets but doesn’t inherit. This protects remaining assets for beneficiaries who will inherit remaining assets tax-free. Established to divide assets between specific charities and beneficiaries, or pass on remaining assets to a designated charity.
What to do when a family member serves as a special needs trustee?
But when serving as trustee, write checks or use a credit card (and pay the credit card bill promptly and in full). Recently our law firm prepared a final accounting for the trustee of a first-party supplemental needs trust. That type of trust must comply with certain rules required by the Supplemental Security Income (SSI) and Medicaid programs.
Who is a special person in a trust?
To qualify as a special person in terms of Type A trust, the beneficiary must have a disability which limits his or her ability to function or perform daily activities and can include physical, sensory, communicative, intellectual or mental impairment.
What are the different types of special trusts?
Types of special trusts Type A special trusts are set up for the benefit of one or more persons who is/are disabled as defined in section 6B(1) of the Act and who are relatives.
When to set up a type B special trust?
Type B special trusts are those set up in a will for the sole benefit of the relatives of a deceased person, and of which the youngest of the relatives is under the age of 18 years. Type A special trusts For a special trust to qualify as a type A trust, it has to comply as follows:
Who is the trustee for a special needs trust?
Parents typically face two choices when selecting a trustee to manage a special needs trust for their child when the parents have died. One choice is a professional trustee –a bank or trust company or an individual who is in the business of serving as a trustee.
How to write a nolo letter for a special needs trust?
You can draft this letter yourself, or start with the Trustee’s Duties Letter provided in Special Needs Trusts, by Steven Elias and Kevin Urbatsch (Nolo). In addition to a trustee’s duties letter, you might want to provide your successor trustee with information about the beneficiary.
Can a sibling serve as a trust trustee?
While in some situations it is appropriate for a sibling or other family member to serve as trustee, in many cases, particularly with a larger trust, naming a family member is not the best decision, for several reasons. First, clients fail to appreciate the amount of work involved in being a good trustee.
Are there conflicts of interest in a special needs trust?
No Conflicts of Interest. A special needs trust must be managed for the benefit of the beneficiary. This means that the person serving as trustee must not act in his or her own interests—or the interests of others—when making investment or spending decisions.