Special Needs Trusts

special needs trusts NJSpecial Needs Trusts are used primarily as a means of preserving assets for the benefit of a disabled family member without disqualifying him or her from receiving benefits from government programs such as Social Security, Medicaid, and local community services.

Can I Leave Funds Directly to my Special Needs Child?

Bequeathing funds to a disabled child’s sibling or close relative with the intent that the money will be used for the special needs child is not a prudent move. The funds may be subject to the claims of creditors or divorce settlements against the relative. If the relative predeceases the special needs child, the funds would go to the relatives’ heirs. Also, the relative to whom the funds are entrusted may be in a higher tax bracket than the disabled child or trust or may not legally bound to use the funds for the special needs child

Funding a Special Needs Trust

A Special Needs Trust can be funded through a will or gifts from relatives and friends made directly to the Special Needs Trust. Many Special Needs Trusts are funded by “second-to-die” life insurance policies which pay out upon the passing of the second parent. If your disabled relative receives a settlement from a lawsuit, a Special Needs Trust should be established ahead of time to avoid losing Medicaid eligibility. We work with many elder law attorneys who specialize in this field and can refer you to an appropriate one.

Special Needs Trust Services in NJ

Urbach & Avraham, CPAs provides a wide variety of services to the families and trustees of Special Needs Trusts. Call us today at 732-777-1158 or request a consultation online to learn more about how we can help you provide for your special needs child.

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