Paul Sullivan, Exploring Trusts for the Disabled, N.Y. Times, Nov. 5, 2010. One type of planning vehicle that avoided contentious debate in all
the recent discussions about taxes and estate planning techniques is
the special-needs trust. These trusts are designed to help a
disabled beneficiary receive maximum needs-based government benefits
and even supplement these benefits. The most difficult part of these trusts is administering them. Money
from them must go directly to service providers rather than to the
disabled individual. The money must be used solely for the disabled
person's benefit. When the disabled beneficiary dies, funeral expenses may be paid out
of the trust. With a first-person trust, the remainder usually goes to
the government as reimbursement. With a third-person trust, the settlor
can direct where the remainder goes.
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Hat tip: Wills, Trust & Estates Prof Blog
Posted by Yi Song, Associate Editor, Wealth Strategies Journal.
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