Taking care of a child or family member who is disabled or mentally ill can be a taxing situation for anyone. One way that people in Michigan can make sure their family members with special needs are taken care of is through trusts. A special needs trust is one that can be used to handle assets and inheritances that are going to those who are disabled.
These trusts have several purposes. The first is that the assets placed in the trust are protected from judgments, so if the person is ever sued, the trust can't be touched. Another purpose is that the trust is less likely to affect the person's government benefits, so Medicaid and Supplemental Security income aren't likely to change because of the inheritance.
A special needs trust is placed in the hands of a trustee. A trustee is the person who will manage how the funds or assets in the trust are used. In the hands of the trustee, the trust's assets are available if the beneficiary needs anything. This means that the trustee can pay for home care, therapy options and other goods or services the beneficiary needs.
Anyone who is considering a special needs trust for his or her loved one must make sure that the trust wording is appropriate. For example, it should state that the intent of the trust is to provide "supplemental and extra care" above what government programs provide. By doing this, the special needs trust won't be construed as a basic support trust.
As you can see, setting up a special needs trust is a great way to make sure your disabled loved one is cared for. Proper wording and a proper set up are vital to ensure that the purpose of the trust is properly conveyed.
Source: FindLaw, "Special Needs Trusts FAQ's" Jul. 29, 2014