Articles Posted in Special Needs Trust

Many Jacksonville Special Needs Trust Lawyers and estate planning lawyers are rejoicing at the fact that the law concerning special needs trusts is about to change for the better.  In Jacksonville, a special needs trust can be of the best tools available for many clients of Jacksonville Special Need Trust Lawyers because it gives a great number of benefits to those that suffer from a disability.

Congress and the president are on the verge of passing The Special Needs Trust Fairness Act.  This act will allow a disabled person to create a special needs trust for himself (a First Person Special Needs Trust).  Previously, the law did not permit a disabled person to form their own special needs trust.

Under the old law, the only way a person could receive a benefit of special needs trust was if he or she had a parent or grandparent, or court order to create the special needs trust.  In Jacksonville, special needs trust lawyers had to jump through costly hoops for those clients without living parents or grandparents.  The only way for these disabled persons to receive this trust is by giving another person guardianship rights or petitioning the court to create the trust.

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As of today, the answer is no you may not create your own Special Needs Trust, but the SNT Fairness Act may change that soon.  Under the current law you must have a guardian or court order to create a SNT for yourself.

Congress gave the estate planning community a great gift today when the Senate approved H.R. 34, the 21st Century Cures Act, which includes the Special Needs Trust Fairness Act by a vote of 94 to 5.  The bill is now seeking final approval from the current sitting President Barack Obama, and political experts predict the president will sign the bill before he exits office.

The U.S. House of Representatives passed the Special Needs Trust Fairness Act on November 30 since time is running out with the current session of Congress.  Senator Glenn Thompson from Pennsylvania, who is the Fairness Act’s sponsor, hurried to find a legal avenue for the getting the act passed before lame-duck session of Congress ended.  Innovatively, he used the Cures Act, which is a lengthy $6.3 billion medical bill that bundles a wide variety of health care related.

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A special needs trust is a great tool to support a loved one with special needs, because if someone leaves money directly to the person it may keep the person with special needs from qualifying for government benefits.

A Special Needs Trust is important because otherwise a beneficiary would most likely burn through his or her inheritance to pay for medical help. A beneficiary who receives a large inheritance will no longer receive government benefits like Medicaid because they will technically have too much money to qualify. A Special Needs Trust allows this money not be wasted because it is created with the specific intent of supplementing government assistance to help support someone with special needs. The money is thus used in a way that does not disqualify the beneficiary from receiving government assistance.

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Congress will soon vote on passing the Special Needs Trust, Fairness Act of 2015, a bill designed to make it easier for people with special needs to create their own Special Needs Trust. A Special Needs Trust is used to enable a disabled individual to hold assets in a trust for his or her benefit by supplementing daily living expenses without making the disabled person ineligible for government benefits.

Under the current law, a Special Needs Trust must be created by the beneficiary’s guardian, parent, grandparent, or by the court even when the beneficiary is mentally competent. This forces someone that needs to fund a special needs trust to rely on family members for assistance, or to spend thousands of dollars to petition a court to establish the trust. Continue reading

In Florida, courts are now permitted to judicially modify an irrevocable trust even when a trust is unambiguous.

Historically, courts held the belief that the intent of the settlor, the person who creates a trust, should only be determined from the actual language of the trust document. This belief led courts to only modify a trust when the trust’s purpose, or provisions within the trust, were found to be ambiguous. If no ambiguity was found the court was unable to consider any other evidence of the settlor’s intent, and the beneficiaries were stuck with whatever the trust says on its face. In Florida, this changed when Florida adopted the Florida Trust code in 2007.

Florida’s Trust code is modeled on the Uniform Trust Code (UTC). The UTC deals with modifications in a number of sections that Florida has mostly adopted. For instance, UTC § 412 allows a court to modify or terminate a trust when the following circumstances occur:

A Florida Supplemental Needs Trust (SNT), also known as Florida Special Needs Trust, is a unique trust designed to benefit an individual with a disability. Supplemental Needs Trusts can be broken down into two categories, third party and self settled. In a well-executed SNT, an unlimited amount of assets can be placed in the trust for the benefit of a disabled person without jeopardizing their qualification for government benefits. These trusts are designed to provide for the extra care and costs above that which governmental benefits supply.

The self settled, or self created, supplemental needs trust has been officially recognized by Congress to benefit individuals under the age of 65, who have a physical or mental disability.

When creating a self settled SNT it is important to know that any assets remaining in the trust at the death of the disabled beneficiary will be used to reimburse the state for Medicaid benefits paid on behalf of the beneficiary. If there is a balance left over it will be distributed to the remainder beneficiaries identified in the trust document.

Florida Special Needs Trust Lawyers & Florida Supplemental Needs Trust Attorneys.

Supplemental Needs Trust Lawyer inage.jpgFlorida Families who have disabled children had a greater need for a Florida Estate Planning Lawyer to prepare for the possibility that they do not outlive their children. When people have disabilities or special needs, it’s important for parents to provide for their welfare while you are alive. There are also significant advantages to creating a Florida Special Needs Trust or a Testamentary Special Needs Trust.

When assets are left to an individual with special needs in a normal trust or outright, it could disqualify the individual from government benefits as well as require that any remaining assets be paid to the government for reimbursement of services provided during the individual’s life.

The following fifteen common assets and applicable beneficiary designations should be reviewed to make sure they will not be paid (or given) directly to the special needs child:

(1) IRA, 401(k) and other retirement benefits.

(2) Life insurance (including employer-provided life insurance) benefits.

A third-party created and funded SNT can have a trust protector. At a minimum, the trust protector should can have the power to: (i) direct the trustee’s actions; (ii) receive financial-investment statements and accountings; (iii) terminate the trust (and have the assets be distributed to the remainder beneficiaries), (iv) remove and replace a trustee, and (v) direct or approve the reformation or amendment of the trust to reflect changes in the law and in order to comply with the settlor’s intent and purpose.

For tax reasons, a trust protector should not be “related or subordinate” to the settlor or the trust beneficiaries, within the meaning of IRC section 672(c).

The thirteen benefits of an inter-vivos stand alone third-party created and funded SNT are:

(1) The trust can be established by the parents (or by any third party, such as the grandparents) for the benefit of the special needs child.

(2) The trust provides for the investment and management of the special needs child’s inheritance by a third party – the trustee.

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