Florida Estate Planning Lawyer Blog
The thirteen benefits of an inter-vivos stand alone third-party created and funded SNT are:
(1) The trust can be established by the parents (or by any third party, such as the grandparents) for the benefit of the special needs child.
(2) The trust provides for the investment and management of the special needs child’s inheritance by a third party – the trustee.
(3) The persons establishing the trust (such as the parents or grandparents) decide the terms and conditions of the special needs child’s inheritance and who is to receive the balance of the trust funds when the special needs child dies – rather than having to reimburse the government for Medicaid and/or “cost of care” benefits provided to the special needs child. One of the significant differences between a between a third-party created and funded SNT and a first party SNT is that there is no Medicaid payback requirement for a third-party created and funded SNT, and a third-party created and funded SNT should not contain a Medicaid payback provision.
(4) The trust does not have to be for the “sole benefit” of the special needs child; other children of the parents can be current beneficiaries (although it is generally recommended that the special needs child be the preferred beneficiary vis-a-vis the other current beneficiaries).
(5) The persons establishing the trust can name who should serve as the initial trustee and as the successor trustees, thereby avoiding the risk of the probate court appointing a “stranger” as a trustee.
(6) The trust avoids family conflict, since the trust spells out who gets what, when, how, and why.
(7) The trust avoids a probate court guardianship for the special needs child’s inheritance.
(8) The trust (if properly drafted and administered) maintains the special needs child’s eligibility for government benefits (assuming the child is otherwise qualified to receive government benefits).
(9) The trust coordinates government benefits and trust assets to meet the special needs child’s lifetime needs.
(10) The special needs child can be any age (i.e., the trust is not limited to a special needs child under age 65).
(11) The trust can provide for the appointment of an independent advocate for the special needs child, regardless of whether the child has a guardian, as well as a Trust Advisory Committee to advise the trustee concerning distributions for the benefit and well being of the special needs child.
(12) The trust protects the special needs child’s inheritance from being seized by his or her creditors, and avoids the imposition of a Medicaid lien.
(13) The trust can be “simple” or “sophisticated,” depending on the amount and type of assets that are used to fund the trust.