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Setting up a special needs trust: 3 steps

On Behalf of | Jul 7, 2023 | Estate Planning

Setting up a trust can offer financial stability to a loved one, such as a special needs trust. In this situation, a grantor may need to create and fund a trust for someone who cannot care for themselves or have a limited capacity to do so.

According to MetLife, special needs trust funds usually cover housing and medical expense concerns; however, these types of trusts may cover many different types of expenses depending on the needs of the beneficiary. Those ready to set up such a trust may want to review the steps involved before they begin.

1. Consider the beneficiary

Setting up a special needs trust begins with considering the long-term requirements of the beneficiary, both financial and otherwise. The grantor may want to consider the beneficiary’s future medical requirements, housing situation and whether physical or mental capacity might decline as time passes. The more situations the grantor can plan for, the greater the chances the trust will provide all the beneficiary requires in the long term.

2. Choose a trustee

The grantor may also choose to take on the duties of the trustee, who disperses the funds according to the trust’s rules. A grantor may also choose a trusted family member, friend or even an attorney or an organization as the trustee.

3. Consider the trust funding sources

The grantor of a special needs trust may fund the account with planned deposits and invite others to add funds as well. Depending on an individual trust document’s wording, the dispersal of the funds may occur regularly or only when the beneficiary requires financial aid to make ends meet.

A special needs trust can fill in financial gaps for a loved one without compromising grants and assistance from government agencies that assist those with disabilities.


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