Trust and Will Planning
The Law Offices of James A. List, LLC covers a broad range of estate planning for its clients, from young couples with their first wills and minor’s guardianship provisions to complex family trust and tax planning. Several topics include:
Special-needs trusts are also called “supplemental-needs trusts” or “quality-of-life trusts.” These trusts, including self-settled trusts and third-party special-needs trusts, supplement the care and the benefits provided to a person with disabilities, and do not replace the benefits.
Self-settled trusts are created from the assets of an individual with disabilities, and are generally the result of some type of personal injury or malpractice award. These types of trusts are used when an injured or disabled person qualifies for Medicaid benefits to pay for their care. Sometimes they are referred to as D(4)(a) trusts, named after the section in the Medicaid statute. After the beneficiary dies, the estate must pay back any remaining funds in the trust to the government agency or agencies providing benefits.
Third-party special-needs trusts are typically funded by the parents, grandparents or guardians of a person with disabilities. They can be created through a will, a living trust, or established by a grantor during their lifetime.
ABLE Act Accounts are not special-needs trusts. They are 529-type savings accounts for a person with disabilities, with strict statutory rules. Able accounts can work in conjunction with special-needs trusts.
The intent of these trusts are the same: The funds enhance the quality of life of a person with disabilities without impacting their benefits. For example, a child with autism may respond well to horseback riding. If the grandfather directed this child’s inheritance into a special needs trust, the trust could pay for these costs.