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Special Needs Trusts

Estate Planning

Special Needs Trusts

At Wyatt we work with clients to develop Special Needs Trusts to provide families with the peace of mind that their loved ones will be taken care of financially.  Our experienced attorneys help families address the legal, financial, and social aspects of a person's life and help develop an effective plan for the future. We pride ourselves on offering exemplary professional service, personalized for each client to ensure that their needs are met.

Special Needs Trusts provide benefits to, and protect the assets of, physically or mentally disabled individuals and their families.  A Special Needs Trust supplements the resources of a disabled person without disqualifying him or her from government benefits, such as Social Security, Medicaid, etc., on which he or she may have come to rely.  Also known as "Supplemental Needs Trusts", these trusts may be funded with proceeds obtained by the disabled person through:

  • normal estate planning of their parents and other loved-ones
  • court proceedings
  • unplanned inheritances
  • life insurance claims
  • settlement of personal injury or other liability claims
  • gifts

Three cases from our offices illustrate the types of planning and benefits that might be achieved through the use of Special Needs Trusts:

  • In one case, aging parents were concerned about leaving assets at their death to their disabled child (Susie) and thereby disqualifying her from the Social Security and Medicaid benefits she was receiving. For years, their plan had been to leave Susie's inheritance to her brother Joe, with the hope (and even expectation) that Joe would take care of Susie. Our special needs planners showed the parents how they could establish a special needs trust in their Wills that would fully accomplish their goals for Susie, provide for professional management of the trust following their deaths, and allow any "left over" assets to pass to Joe (or his children) at Susie's death. Best of all, utilizing the Special Needs Trust would enable Joe to maintain a personal family relationship with his sister, rather than causing him to assume a parental or adversarial role. Susie's parents and Joe were very happy with the plan.
  • In another case, a mother who had saved and skimped to provide for her then 61 year old child (Charlie) who struggled with Cerebral Palsy, had not done the type of estate planning mentioned above. In fact, her Will left her modest estate to Charlie without restriction. The problem was that if Charlie took the inheritance, he would lose his government benefits and have to spend virtually all of the inheritance before receiving his benefits again. Charlie and his sister consulted with us and we explained that the law allowed Charlie to ask the probate court to direct that his inheritance be placed in a Special Needs Trust to prevent the loss of government benefits on which he had come to rely. The Special Needs Trusts also enabled him to have a couple of things he had always wanted but had never been able to afford. Charlie was thrilled to take advantage of this opportunity.
  • In many cases, we work with trial attorneys as neutral consultants to advise them how Special Needs Trusts may be used (pursuant to very specific federal laws) to place funds received in a personal injury award or settlement into a special needs trust to achieve the benefits mentioned above. By consulting on a neutral basis (i.e. not advocating any position on behalf of either the plaintiff or defendant) we are often able to identify sources of benefits available to the injured party and to bring all parties closer together - and to often settle their cases - without prolonged and expensive litigation. 

In addition, we often work with outside financial consultants to help the injured person set up financial structures in addition to the Special Needs Trust to help ensure their support for many years, if not their entire lifetime. We do this not only through our extensive experience and lecturing in this area, but also through our national contacts generated by involvement in organizations such as the Special Needs Alliance (www.specialneedsalliance.com), on whose board one of our members serves.