People thinking about their legacies may decide to create trusts for a variety of different reasons. Some people with large business holdings create trusts to protect the organizations that they created or inherited from sale or dissolution after they die. Others establish trusts to protect a legacy from misuse by beneficiaries.
Occasionally, the reason that someone decides to create a trust is concern about a vulnerable family member. Both congenital and acquired medical conditions can render people incapable of living fully independent lives. A special needs trust can be a useful tool for those who have family members with disabling medical conditions.
Special needs trusts promote independence
Unlike gifts or direct inheritances, trusts do not give beneficiaries immediate control over property. That separation can be valuable for those with disabling medical conditions. They may qualify for certain benefits that allow them to feel a sense of independence and personal pride instead of relying on their family for everything. A large inheritance might eliminate their eligibility for those benefits. A special needs trust that limits distributions can enhance someone’s lifestyle without eliminating their eligibility for certain forms of aid that allow them to live independently.
Special needs trusts deter abuse
When someone with special needs has access to and control over significant resources, that could lead to misconduct by other people. The financial abuse of people with disabling medical conditions is a common occurrence. Family members may manipulate someone to gain access to their resources. Some people even intentionally befriend individuals with special needs in hopes of accessing some of their resources.
Having a trustee control the distribution of resources removes the incentive for people to establish manipulative or abusive relationships with the beneficiary of the trust. The parents and other family members who establish a special needs trust can feel more secure in the knowledge that a loved one with a disabling medical condition can receive the support they require regardless of what the future holds.
Properly structuring and funding a special needs trust can make a major difference for those who love someone who is dealing with significant medical challenges. A trust can give a vulnerable loved one long-term support while giving their family members lasting peace of mind.