You may have grown accustomed to taking care of your loved one with special needs, physically, emotionally, and arguably most pivotal, financially. This is why you may want to maintain some level of control over the gift, inheritance, and life insurance policy proceeds you leave behind for them. In other words, you may want your established special needs trust to be revocable. Continue reading to learn whether you can make a special needs trust revocable and how an experienced Putnam County trusts attorney at the Law Offices of Andres D. Gil, PLLC can help determine your eligibility.
Am I eligible to make a special needs trust for my loved one?
Before diving into any estate plans, you must confirm you are, in fact, eligible to make a special needs trust for your loved one. Well lucky for you, in New York State, just about anyone may create and establish a special needs trust for the benefit of a loved one with a disability. This may be regardless of whether your loved one is your blood relative or simply someone you care about.
For example, you may be the friend of a family with a child with a disability. If you do not have any direct descendants of your own, you may feel more inclined to make this child the beneficiary of your special needs trust. This may be more ideal than having your assets land in the hands of distant relatives with whom you never had a close relationship or having them be “escheated” into the state’s coffers.
Am I able to make a special needs trust revocable?
Now, only one type of special needs trust may be made revocable: the third-party special needs trust. This trust type allows you to set aside gifts, inheritances, and life insurance policy proceeds that can be used to cover the cost of care for your loved one with a disability (i.e., your beneficiary). So, given that you use your own assets to fund this trust type, you may revoke, terminate, or sell the trust at any point during your lifetime.
Contrastingly, a first-party special needs trust must be made irrevocable without exception. This is because this trust type is funded by your beneficiary’s personal assets and income instead of your own. In turn, it is primarily used to protect your loved one’s assets and income; all while allowing them to still fall below the resources limit for their eligible need-based government benefits programs (i.e., Medicaid and Supplemental Security Income). What’s more, it allows their quality of life to improve, as they may use this trust’s funds to pay for their other basic needs that these government programs do not cover.
In conclusion, you should not second-guess your decision to retain the services of a skilled Putnam County estate planning attorney. This is because we can guarantee someone at the Law Offices of Andres D. Gil, PLLC can guide you through every step.