You may wish to somehow incorporate each of your loved ones into your estate plan. However, you may have to establish a unique set of plans for your loved one with special needs; who may rely on you the most and therefore may be the most affected when you are, sadly, no longer around to take care of them. Primarily, this may entail establishing a special needs trust, whether it be a revocable or irrevocable one. Read on to discover whether a special needs trust is revocable or irrevocable and how a seasoned Broward County special needs planning lawyer at The Probate Lawyers can help you select the best trust type for you and your loved one.
What are the different types of special needs trusts?
Just like most estate planning documents, there are different types of special needs trusts you may choose from. The two most popular choices are first-party and third-party special needs trusts.
Firstly, a first-party special needs trust may only be funded by the assets and income of your loved one (i.e., your beneficiary). This may allow your beneficiary to collect both need-based government benefits and their trust’s funds without exceeding the government benefits program’s enforced resource limit. Then, a third-party special needs trust may be funded by you (i.e., the grantor) to leave behind for your beneficiary. This may allow your beneficiary to receive your gifts, inheritances, or life insurance policy proceeds without, again, exceeding the government benefits program’s enforced resource limit.
Your options to choose between pooled and hybrid special needs trusts are also worth mentioning. On the one hand, a pooled special needs trust may be created by a nonprofit organization for your beneficiary. This may allow for your beneficiary’s basic needs, the ones not covered by their need-based government benefits, to be supplemented. On the other hand, a hybrid special needs trust may best protect your beneficiary’s assets in the urgent event of Medicaid crisis planning. Of note, this may entail a payback provision.
Can a special needs trust be revocable or irrevocable?
Generally speaking, certain special needs trust types are revocable while others are irrevocable.
Namely, a first-party special needs trust is an irrevocable trust type. This may be evident because your beneficiary uses their personal assets and income to fund the trust. So, as the grantor, you may be barred from intervening and changing its terms and conditions in any way. However, a third-party special needs trust may either be revocable or irrevocable. However, if you choose to make it revocable, it may become irrevocable at the time of your death, if not sooner.
In conclusion, you should not second-guess your decision to retain the services of a competent Broward County estate lawyer. This is because we can guarantee someone at The Probate Lawyers can guide you through every step.
