A Utah Special Needs Trust allows the parent or guardian of a special needs child to help the child receive the benefit of an inheritance without compromising the important medical, health, income, and disability benefits from the State or Federal government. With a special needs trust, you allow grandparents and great-grandparents of the child to gift money while the child is young, while those family members are still living, or through their estate planning. Creating a Special Needs Trust early allows you to purchase a life insurance benefit that directly funds the special needs trust while you are younger, thus allowing you to purchase insurance when it is cheapest for you. Your new Special Needs Trust will also have a separate tax ID number for the Trust, so the child (and you) are not compromising your ability to receive state assistance while funds are put there to benefit the child that needs them most. An experienced Utah special needs trust attorney can assist you in navigating how to set up properly the trust and is an important component of estate planning.
See our article on Why a Special Needs Trust?
Other types of Spendthrift or Family Trusts usually aren’t appropriate for Special Needs children because they don’t address the specific needs of the beneficiary or his future lifestyle. Even in situations where a family may have significant resources to help a disabled family member a Supplemental Needs Trust should be established to address these issues. Just as importantly, Trust funds are not subject to creditors or seizure. Therefore, if the disabled beneficiary should ever be sued in a personal injury or other type of lawsuit, the beneficiary is not a “deep pocket” because monies placed in the Trust are not subject to a judgment. A Utah lawyer who has knowledge of setting up special needs trusts can further advise on this area.
When Should I Establish a Supplemental Needs Trust in Utah?
A Supplemental Needs Trust can be established at any time before the beneficiary’s 65th birthday. It is very common to create a Supplemental Needs Trust early in a child’s life as a long term means for holding assets to benefit the disabled family member. As a part of Estate Planning, the costs of the creation of the Trust are tax deductible. Additionally, the disabled or chronically ill individual may at some time during his or her lifetime come into funds from third party sources, such as a personal injury settlement or a bequest from relatives or friends, Social Security back payments, insurance proceeds, or the like.
Upon creation, you should immediately create a new Tax ID number for the Trust. The Trust can then be funded directly without compromising yours or your child’s qualification for benefits. Also consider discussing with your relatives the establishment of the Trust so they are aware and can contribute as they desire to assist your beloved child. A lawyer in Utah can assist Utah residents with setting up a special needs trust.
For all of the decisions you can make for your child with Special Needs, be assured that you have found competent legal counsel who can help you preserve your assets, your child’s benefits, and your peace of mind. As counsel to many families with special needs children, there is no greater heartbreak than disinheriting a special needs child to preserve benefits. Similarly, there is no greater joy than knowing you have protected your child and given them a lifetime of growth, opportunity, vacations, and experiences.
Contact a Lawyer Experienced with the Utah Special Needs Trust
Contact Pearson, Butler & Carson, PLLC today at (801) 495-4104 to schedule a free consultation and take the first step toward a setting up a special needs trust and will. We also have extensive experience with other estate planning law matters, including the setting up of wills, living wills, and other types of living trusts. We have a Salt Lake City Utah special needs trust lawyer and a Layton Utah special needs trust lawyer team to help.