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How complex are special needs trusts?

Many Indiana parents with special needs children worry about the future of their loved ones. One way parents address their concerns is to create a special needs trust that can provide for their children years into the future. But setting up a special needs trust is not a simple matter. It requires specific composition so that it meets legal standards that does not deprive your child of important government benefits and can last a long time.

As explained by U.S. News and World Report, a special needs trust has to walk a fine line. It should provide a special needs person with enough money to meet needs but not so much that the recipient fails means tests that could disqualify the recipient from government benefits. Also, special needs trusts are subject to laws set by both the federal government and the state. Some trust decisions may not be finalized unless a court approves them.

Special needs trusts are also very specialized, tailored to the needs of each recipient. Some individuals, though physically disabled, can manage their own finances and hold a steady job. There are people who have developmental disabilities. They may have limited prospects for working at a job but can still handle elements of home life like cooking meals or maintaining hygiene. Then there are people who need constant attention from a guardian or caregiver. The wide variety of disabilities means trusts will be just as varied.

A special needs trust should also be tailored to last for the lifetime of the disabled recipient, which will likely be a span of decades. This means structuring the trust so that it contains enough money for such a long period of time and to make sure all the right steps are conducted so that the trust is legally sound and not derailed early on. A trust should also have the right administrators, with successors provided for in case a current trust administrator cannot function in that capacity any longer.

The complexity involved in setting up a special needs trust makes professional assistance an essential component. Due to the varying needs of Indiana residents with special needs relatives, do not take any of this information as legal counsel for your situation; it is only written for educational benefit.