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Third-party Special Needs Trust

If you have a child or dependent with special needs, you may worry about their future. A third-party special needs trust (SNT) can give you peace of mind by securing financial provision for your loved one without harming their eligibility for public benefits like Medicaid or SSI.

Call Commonwealth Life & Legacy Counsel at 434-589-2958, or in or near Powhatan call 804-598-1348,  to learn more about how a Virginia SNT can protect your most vulnerable family members.

How a Third-party Special Needs Trust Works

A third-party special needs trust (a.k.a. supplemental needs trust) is a type of legal protection that a settlor, usually a parent, family member, or legal guardian, creates for the sole benefit of a person with special needs. A third-party SNT can be either a revocable or an irrevocable trust.

The main advantage of a third-party SNT over leaving assets directly to a disabled person is preserving the beneficiary’s eligibility for government benefits. Because assets are owned by the trust and not by person with special needs, they don’t count toward Medicaid and other public benefit calculations for the trust beneficiary.

Third-party SNTs require a trustee to control fund distribution. The settlor may serve as the trustee during their lifetime and name a successor trustee to take over trust management after their death.

SNT funds may go toward the beneficiary’s qualifying needs, like dental care, rehabilitation programs, medical equipment, travel, and more.

Requirements for Special Needs Trusts in Virginia

SNTs in Virginia must comply with a list of legal requirements, such as:

  • The trustee must have sole discretion over the distribution of trust funds.
  • The trust agreement must protect the disabled beneficiary’s eligibility for public benefits.
  • The trust agreement must specify who will receive the remainder of trust assets after the beneficiary’s death.
  • The trust document must appoint successor trustees who will assume trust management after the original trustee’s retirement or death.
  • The agreement must be amendable to comply with any relevant changes in state or federal law.

Do You Need an Estate Planning Attorney to Set Up a Third-party SNT?

Working with a competent estate planning attorney will help ensure that the third-party special needs trust suits your family’s situation and follows Virginia law. Commonwealth Life & Legacy Counsel will:

  • Tailor the trust document to make sure it accomplishes your goals and meets your loved one’s needs
  • Ensure the trust protects assets from Medicaid and other government agencies
  • Advise you on choosing the right successor trustee or working with a professional trustee
  • Help you understand what the trustee can and cannot do without influencing eligibility for public benefits

Commonwealth Life & Legacy Counsel: Helping You Secure Your Loved One’s Future

A third-party special needs trust can provide financial assistance for family members with special needs, preserve their eligibility for government benefits, and protect trust assets against creditor claims. The experienced estate planning team of Commonwealth Life & Legacy Counsel will help you set up the right type of trust to protect your loved one’s interests.   As parents of a special needs child, we understand these issues on a very personal level.

Call 434-589-2958, and in or near Powhatan, call 804-598-1348 for reliable legal advice on creating a third-party special needs trust in Central Virginia.

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