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Errors made in a special needs trust can harm the beneficiary

On Behalf of | Aug 25, 2022 | Estate Planning |

When someone you love has a disabling condition, whether a genetic anomaly or the result of injury, the desire to protect them is intense. The urge to shield a loved one from hardships can become so powerful that it consumes nearly every part of your existence.

Devoting your life to a family member with special needs is admirable, but what will happen to your loved one after you die? Many solve this problem by creating a special needs trust (SNT) for their disabled relative. Unfortunately, it is easy to make mistakes in an SNT that can harm the beneficiary.

Making the trust revocable

The purpose of an SNT is to benefit the individual without disqualifying them from government benefits. If the SNT you leave behind is revocable, it could negatively affect your loved one’s assets and eligibility requirements. Make sure your SNT is irrevocable, meaning it cannot be revoked.

Choosing an inexperienced trustee

Managing any trust fund is complicated, but the consequences of poorly administrating an SNT are especially harmful. A trustee must make financial decisions that preserve your family member’s eligibility for benefits. Let experience be your top priority when selecting a trustee.

Using DIY or cookie-cutter trust documents

Your family member is an individual with an established personality and unique considerations. They deserve an SNT drafted around their specific lifestyle, needs and medical condition. The ideal way to accomplish this is to seek guidance from an experienced estate planning professional.

You have much more to learn about special needs trusts in Pennsylvania. Becoming more familiar with the legal aspects of estate planning and trust formation can help you create documents that protect all your loved ones after your death.