An Overview of Special Needs Trusts
Ian S. Oppenheim, CELA | Halifax, MA
I want to talk to you about the challenge that families with a disabled person have in providing for their future needs but at the same time not disqualifying that special needs person from receiving governmental benefits such as Supplemental Security Income or Medicaid. There are two types of funds which need to be protected. The first of funds coming from the family members, that’s called Third Party Money. It may be money that comes from parents or grandparents or sisters or brothers or friends of the disabled person. The second type of funds that need to be protected are funds that are owned by the disabled person themselves. That money may have come from a personal injury suit, it may have come from an inheritance that wasn’t properly set up or it may have come from lottery winnings. The first type, money coming from family or friends, can be protected by either of two types of trusts. The first type of trust is a Living Trust, that trust can either be changed, meaning it’s revocable, or the change is restricted and that would be an irrevocable trust. The second type of trust, which could hold money from the family, would be a trust which is included within a Will. That type of trust is called a Testamentary Trust. On the other hand in order to protect funds which are owned by the disabled person herself, there’s two types of trust that can achieve that purpose. The first is called a D4A Trust and the second is called a D4C Trust, also known as a POOLED Trust. These trusts are very complicated, and your attorney needs to know how to set them up, how they should be drafted, because they’re not form trusts they have to be created around the situation in which the disabled person and the family finds themselves.
Because of that they really need to see an attorney who understands what those trusts are, how those trusts are arranged, and the thought that needs to go into the creation of those trusts. And that person, the person who is trained in doing this type of work, is a Certified Elder Law Attorney.