Archive for October, 2011

What is a Special Needs Trust?

As a refresher, at it’s most basic level, a “trust” is a document that creates a legal relationship between a beneficiary and a trustee.  The trustee is the person tasked with taking care of the trust’s assets for the benefit of the beneficiary.  A Special Needs Trust (also called a “Supplemental Needs Trust”) is a special kind of trust that is specifically created for a beneficiary with special needs.  The typical beneficiary of a Special Needs Trust is someone with a disability such as Downs Syndrome or autism.

Why would anyone need a Special Needs Trust to help care for a disabled person?  How does the Trust help?

The Special Needs Trust helps protect the disabled person’s eligibility for government benefits such as Medicaid or supplemental security income (“SSI”).  Many government programs, like Medicaid, look at the recipient’s income level to determine eligibility.  So, if a disabled person receives an inheritance or other large sum of money to provide for his/her care, this could destroy Medicaid eligibility.  This is where the need for Special Needs Trusts comes into play; instead of giving money for the beneficiary’s support directly to the beneficiary, you can give it to the trust for the benefit of the beneficiary.  This way, on paper, the beneficiary didn’t receive a large sum of money outright, and the beneficiary gets the benefit of the support money and gets to retain Medicaid eligibility.

How will the Special Needs Trust work?  How can you be sure that the trustee will take care of the disabled beneficiary?

The best way to get a special needs trust in Texas is to hire a special needs trust lawyer, choose trustees you can trust, take the trust document to the bank to set up a trust account, and then fund the trust account with the money you intend to provide the disabled beneficiary for the beneficiary’s support.

The most important thing with a Special Needs Trust is to form the trust document in such a way that the trustee can’t do something to make the beneficiary ineligible for government benefits.  For example, the trust should contain restrictions on the amount the trustee is allowed to disburse to the beneficiary.

You will pick a trustee and alternative trustee(s) in the trust document.  The trustee should be someone responsible and you know will look out for the best interests of the beneficiary.  It is also important that the trust is worded correctly and contains all the appropriate restrictions.  That is why it is a good idea to make the minimal investment on a Special Needs Trust attorney.  The trust attorney will ensure that the money going into the trust will (a) actually go to the benefit of the disabled beneficiary and (b) ensure that the disabled person remains eligible for government benefits.


Shutt Law Firm provides clients Special Needs Trusts in Dallas, Special Needs Trusts in Richardson, Special Needs Trusts in Plano, and throughout the DFW area.  Visit www.ShuttLawFirm.com for more information on Texas trusts, estate planning, probate, probate alternatives, or guardianship.

Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, power of attorney in Richarson, or Richardson guardianship lawyer.

DISCLAIMER:  Nothing in this blog post constitutes legal advice.  The information provided herein is merely provided in the spirit of education.  If you have a legal question, you should consult an attorney for your specific legal situation.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.



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