Special Needs Trust in New York
A Special Needs Trust in New York Can Protect Your Government Benefits, and Understanding How it Works is Beneficial to Both You and Your Loved One
When a child or other loved one has a chronic illness or disability, it is natural to want to take care of them. They rely on government benefits each day, but sometimes it is not enough. A special needs trust in New York can be established to help them with expenses while also protecting their government benefits. Speaking with an estate planning or trust attorney can help you make the right decision. Moreover, understanding how a special needs trust in New York is critical in getting the most out of it.
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Questions And Answers
A special needs trust in New York is a trust made for a person with special needs, such as a chronic illness or disability. It is an estate planning tool that, when used properly, will benefit the beneficiary with the disability and will improve their quality of life.
It is important to use a special needs trust in New York because it will protect the government benefits the individual may be receiving, such as Medicaid or SSI.
There are limitations as to what the money in a special needs fund can be used for. However, for most expenses, the funds are okay to use. The funds within a special needs trust cannot be used for everyday living expenses, such as groceries or utilities.
Yes, the grantor can make themself the beneficiary of the special needs trust. However, the funds, in this case, must be used to reimburse the government for any benefits that were used before the grantor’s life.
Usually, a parent or guardian establishes a special needs trust in New York. However, anyone can create a special needs trust for the benefit of someone else.
An estate planning attorney has expertise with special needs trusts, and they can help you through the entire process. Establishing a trust can become a confusing endeavor. An attorney will know the best way to draft and establish a trust for your circumstance, so it is best to consult with one before moving forward. This will ensure that you are protecting your loved one in the best manner possible through the special needs trust.
Yes, there are different types of special needs trusts in New York. They include self-settled trusts, pooled trusts, and third-party trusts. Deciding which trust is the best for your situation is best determined by speaking with an estate planning or special needs trust lawyer.
A special needs trust in New York does not, in and of itself, qualify anyone for government benefits. Rather, it does not affect the individual’s eligibility for government benefits and works supplementally to those benefits.
Yes, a trustee of a special needs trust in New York may resign if they decide they can no longer fulfill the role. However, you may resign for any reason. The special needs trust may have instructions dictating how a successor may be chosen, so it is best to read through the trust documents first before resigning.
There are certain instances when canceling a special needs trust in New York may be advantageous, especially if the beneficiary gets better and does not need the trust anymore. Therefore, it is possible to cancel a special needs trust. However, you should always consult with an attorney first to make sure it is the right decision.
No, a disabled person may not act as a trustee in their special needs trust. A trustee must be chosen during the drafting process of the trust.
Yes, a special needs trust will pay for the treatment and care of the beneficiary for whom the trust was made. This includes any long-term care that is necessary, which is especially important when they have a chronic illness.
A payback provision is required when the funds in the trust are provided by the beneficiary. If the funds are provided by someone else, then the payback provision is not required.
Education is a valid use of the funds in the special needs trust. It will also help cover any expenses related to education, such as books, writing tools, and computer equipment.
Yes, the funds may be used to pay property taxes. It may also be used for home insurance bills. Furthermore, the funds may also be used for vehicle taxes and care maintenance.
The funds located within a special needs trust can be used for entertainment purposes. This includes televisions, movies, vacations, magazines, and any other hobby-related items.
No, the special needs trust should not distribute cash directly to the beneficiary. This will directly affect their SSI, which will deplete with each dollar receive above $20. Once SSI is completely depleted then their benefits from Medicaid are in jeopardy.
Yes, the distribution of cash to a beneficiary will directly affect their eligibility for government benefits. Instead, the trustee should use the funds on behalf of the beneficiary.
Generally speaking, if you are not worried about government benefits, then you may not need a special needs trust since one of its main purposes is to protect government benefits. However, an attorney may be able to advise you if it is still something you wish to consider.
Yes. Any gifts made outside of the special needs trust in New York will disqualify the beneficiary from government benefits. For example, were someone to leave the beneficiary a cash gift upon their death, this would be ground to end government benefits. It best to put these funds into the trust and discuss this with the trustee.