Oklahoma residents who have relatives or family members who are physically disabled or mentally ill understand that securing the financial futures of these relative can be a source of anxiety and worry.The worry can become more acute when parents or grandparents must plan for the lives of their children or grandchildren after they die themselves. This is why special needs trusts, a specific category of trusts, were created.
What does a special needs trust do? This type of trust provides income that can allow a beneficiary to live without becoming impoverished. The flow of income to the beneficiary is administered by a trusted person who is faithful to the wishes of the person establishing the trust and dedicated to meeting the needs of the beneficiary, who typically cannot manage complicated financial affairs on his or her own.
How long does a special needs trust last? This type of trust usually lasts until the beneficiary dies or trust funds are completely spent. It is set up to address a beneficiary's specific needs and lifestyle, often with an indefinite future in mind. Many are also structured to make sure payments to the beneficiarywill not lead him or her tolose critical government benefits such as special housing, Supplemental Security Income and vocational training. The administrators of government programs do not consider these trusts when looking at a beneficiary's program eligibility.
Who administers a special needs trust? In most cases, the trustee is a family member, although a court can appoint a third party if none is available or competent. The choice of trustee is critical, especially if a special needs trust is being established to benefit a younger person such as a teenager.
As long as specific language is included in trust documentation, anyone can set up a special needs trust. Consulting an attorney, however, is the best way to ensure that a trust will meet all state requirements.
Source: FindLaw, "Special Needs Trusts FAQ's," accessed March 7, 2015