When you set up a trust, you can usually decide to make it revocable or irrevocable. Not all trusts offer these options though. Some, like a special needs trust, often need to be irrevocable. A Woodland Hills special needs trust attorney from our firm can tell you why this is and discuss some of the benefits of this kind of setup.
What Is the Difference Between Revocable and Irrevocable?
The main difference between a revocable trust and an irrevocable trust is that the former allows you to change the rules once it’s been established. An irrevocable trust does not allow you to edit its terms later on. Some people do not like that because it feels like you are losing control of some of your assets.
There are some positives though. You cannot change the terms of your trust, but the assets inside are also better protected. Creditors cannot come after those assets, because if they are in an irrevocable trust they are technically not yours. The trust would also protect these assets from lawsuits.
Why Does a Special Needs Trust Need to Be Irrevocable?
Most special needs trusts need to be irrevocable because this protects the beneficiary. No one can go in and change the terms of the trust later. A person with special needs can easily be taken advantage of. A trust like this does not just protect your assets, but it protects your loved one from someone who would want to take their inheritance.
Is Setting Up a Special Needs Trust a Good Idea?
Should you really go to the trouble of setting up a special needs trust? Why not just leave a loved one a bunch of money that they can use for whatever they want to?
This may be a viable way to leave behind something for many of your beneficiaries, but it can be a bad idea if you are trying to provide for someone with special needs. This is because they may rely on government benefits to survive. There are strict limitations on programs like Supplemental Security Income or Medicaid. Having too much money can lock someone out of benefits like those or certain types of support services.
Because the assets in a trust belong to the trust, they will not stop your loved one from seeking out government benefits. The money you leave behind can allow them to have a fuller life and pay for anything that their benefits do not cover. Maybe they want to travel or perhaps they have a hobby that they love. Your gift can support this.
How Can an Estate Planning Lawyer Help Me?
So if you are looking for a way to care for a loved one after you are gone, a special needs trust might be your best option. Contact the Law Offices of Yacoba Ann Feldman and ask to schedule a consultation. We can help you make the most of the estate planning tools and options at your disposal.
