What Is A Special Needs Trust? When Is It Necessary?

A special needs or supplemental trust can be necessary under certain circumstances. This trust is designed for a beneficiary who is receiving government benefits such as Social Security Disability Income, or Medicaid benefits without jeopardizing their continued eligibility for whatever benefits that they’re receiving. This is a unique and complex area of the law which is ever changing in terms of what permissible distributions the government agencies are allowing these beneficiaries to receive from trusts like these. It’s important in these types of trust arrangements to first determine where the money is coming from to fund the trust. Whether it’s coming from the individual beneficiary or an inheritance that’s coming from a child, parent, grandparent, or other family member, because that will dictate the type of trust and whether or not there needs to be a payback from the trust that’s created to the state agency that’s provided the benefit over time.

Generally speaking, special needs trusts are providing supplemental benefits to pay for things that are not being provided for by state agencies and under the programs that the individual beneficiary is otherwise receiving income for.

What Is A Will? Do I Really Need One If I Have Other Estate Planning Tools In Place?

Even if you have other estate planning tools in place a will could still be necessary. A will is a document where you are determining who you want your heirs to be and how you want them to receive whatever assets are flowing through the will when you die. It is not uncommon these days that a will may not govern any of the assets that a person dies owning because those assets are either owned in a joint and survivorship capacity with their spouse, children, or other family members. Similar assets, such as bank accounts and brokerage accounts for which they have named spouses or other family members as payable on death may not be covered by the will. Finally, other assets such as life insurance policies, retirement plans, IRAs, and 401(k) accounts where they’ve named spouses or other family members as beneficiaries would be excluded. That doesn’t mean that you still shouldn’t have a will because there are certain things that only an executor under a will can do.

An example is if the events of your death are the result of the negligence of someone else for which a lawsuit can be brought. That can only be brought by either an executor under a will or the administrator of a person’s estate. Part of estate planning is determining who you would like to be the ones involved in the administrative elements in your estate; which could involve lawsuits. That would be a reason to have a will even though assets may not be passing through it.

What Happens When Someone Dies Having An Estate Plan In Place? Who Takes Over?

Determining who takes control of your estate when you die depends on what documents comprise the estate plan. If it’s a will based plan where there are assets in Virginia that have a value greater than $50,000 then the will needs to be recorded in the Circuit Court of the city or county where the person dies. The person that the decedent nominated in the will as the executor needs to be appointed in a certificate issued by that court in order for them to access those assets in excess of $50,000 to fulfill the instructions under the will. If there are assets that the person died owning individually but they are less than $50,000 then the will still needs to be recorded but there is no executor that needs to be appointed. Rather those assets can be administered under an affidavit that doesn’t require the formal qualification of an executor and therefore wouldn’t require any additional oversight by the court.

It depends what assets are passing through the will, what the values of those assets are, and how those assets can be administered by someone other than the decedent. If it’s a trust based plan and there are assets that have been contributed to the trust prior to the decedent’s death then in those circumstances the successor trustee that’s been nominated by the decedent can access and take over those assets that are already inside the trust and fulfill the instructions based on the trust document.

It depends upon what types of documents the decedent had, what assets the decedent owned either in those documents or individually, and what the values of those assets were as to exactly how those assets are accessed and administered.

For more information on Special Needs Trusts In The State Of Virginia, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (703) 492-9955 today.