If someone you love has a disability, you’ve probably spent years making sure they’re well taken care of. But what happens when you’re no longer here to oversee that care? That question can feel overwhelming because it’s not just about money or legal documents. It’s about protecting their future, their dignity and the support systems they depend on.
A will is not enough. If your loved one inherits money or property outright, they could lose eligibility for crucial government support, such as Medicaid or Supplemental Security Income (SSI). Additionally, it may also expose them to people who don’t have their best interests at heart, potentially leading to financial exploitation.
In such situations, a special needs trust (SNT) can go a long way in providing support. This type of trust allows you to set aside funds for your loved one without disrupting their eligibility for government benefits.
How a special needs trust works
Once you create the SNT and transfer assets into it, you’ll then appoint someone (a trustee) to manage it on your loved one’s behalf. The trustee can use the money for expenses that improve your loved one’s quality of life, such as therapy, transportation, education, assistive technology or even hobbies. In short, it adds dignity and flexibility without risking your loved one’s stability.
There are two main types of SNTs. A third-party SNT, typically created and funded by someone other than the beneficiary, is the most common for new families. A first-party SNT is funded with the beneficiary’s own assets. For most parents planning ahead, the third-party SNT is mostly preferred because it allows you to leave money, life insurance proceeds or other assets to the trust.
Don’t leave anything to chance
SNTs must be carefully written to comply with both Virginia and federal law. This means ensuring it’s properly structured, funded and aligned with benefits eligibility rules. Otherwise, it may not achieve its intended purpose. Reaching out for legal guidance can help you do everything right and make the most of these and other estate planning tools to protect your loved one’s well-being long after you’re gone.
