Special Needs Planning

Special Needs
Planning

Ensure their care after you are gone

There is someone special in their life and you give them just as much love as they give you. They are family and an equal part of your life, but in your equitable nature, you want to support them and give them more care. Through Supplemental Needs Trusts, or Special Needs Trusts, you can set out the guidelines they will need so that others can take care of them if you are unable to do so.
Often referred to as third-party supplemental needs trusts, we can help clients create trusts for a loved one through an estate plan beneficiary designation.
Your revocable living trust, the main document in your estate plan portfolio, should contain provisions that allow for a supplemental needs trust to be created and used if a beneficiary is disabled.

Special Needs Planning for Disabled
Leaving money to a loved one with a disability

If you want to leave money or property to a loved one with a disability, you must plan carefully. Otherwise, you could jeopardize your loved one’s ability to receive Supplemental Security Income (SSI) and Medicaid benefits. By setting up a “special needs trust” in your revocable living trust, you can avoid some of these problems.

A special, or supplemental needs trust is meant to supplement someone’s needs – not replace the support they get from government programs such as Medicaid and Supplemental Security Income (SSI). Therefore, the trust assets of a special/supplemental needs trust should only pay for expenses that government programs cannot pay for, especially those expenses that provide added comfort or a better lifestyle. The job of the trustee of the supplemental needs trust is to use their discretion when deciding when and how to use the trust assets so they don’t jeopardize the persons eligibility for government aid.

Examples of expenses a special needs trust should not pay for:

  • Groceries or food
  • Rent
  • Utilities
  • Property taxes
Common questions about special needs trusts and supplemental needs trusts
  • What is the difference between third-party and first-party special needs trusts? – A third-party trust is commonly created by a parent, through their estate plan, when they leave money or property to a child with special needs. A first-party trust is created by and funded with assets of the person who has special needs. A third-party trust is the most common type of trust created for someone with special needs.
  • What is the difference between a special needs trust and a supplemental needs trust? – For the most part, just semantics. Most individuals use both terms interchangeably. However, attorneys will often use the term supplemental needs trusts to denote third-party trusts, and the term special needs trusts to denote first-party trusts.
  • How can special needs trust funds be spent? – The assets of the trust are commonly used to pay for out of pocket medical or dental expenses, education, a vehicle, home furnishings, and work-related assets.
  • What is a testamentary special needs trust? – It is a trust that becomes effective when the settlor/grantor/creator of the trust passes away. If a parent creates an estate plan with a revocable living trust, and, they leave some of their assets to a disabled child to be managed by the trustee of a special needs trust, that is an example of a testamentary special needs trust.
Estate Planning Guidance
Lawyer Jeff Skrysak

Attorney Jeff Skrysak is available to meet with you – initial consultations are free.

We help our clients set up wills or revocable living trusts that create a special needs trust for one or more beneficiaries. On their death, the special needs trust will become effective and the assets will be managed by a trustee for the beneficiary who has special needs.
If you want to speak with us about special needs planning as part of an estate plan, please do not hesitate
to contact us.

Oregon Laws Regarding Trusts

Below is a small sample of the laws that apply to trusts in Oregon.

ORS 130.720 describes the general powers of a trustee

ORS 130.725 describes the specific powers of a trustee