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Hosted by Jeffrey Bellomo, Esq., CELA, LLM, and over 20 years of experience practicing in estate planning.  We’ll discuss all things Estate Planning and Law.  Our mission is to help educate so that what happened to the Bellomo family doesn’t happen to you. We hope to answer your most burning questions and support you with a solution to estate planning that works for you and your loved ones.

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Special Needs Trusts

Aug 26, 2022

In this episode of the show, we explain what you need to know about special needs trusts. It is important to first look into obtaining a Power of Attorney, and if the disabled individual is unable to do so, go through a guardianship hearing. When planning for individuals with special needs/disabilities, there are third-party options, first-party options, and a few substitutes that can also be viable options.

The most important thing is choosing an option where an individual can receive money through the trust without losing all of their government benefits. The best thing to do is seek professional guidance because making a mistake with special needs trusts can be very problematic. Come join us on our next episode for more tips and tricks for all things estate planning and elder law!

Key Takeaways 

Takeaway 1: Power of attorney for individuals with disabilities 01:38

  • The main issue of concern with individuals with disabilities is when they turn 18, can they sign a power of attorney?
  • A power of attorney authorizes another individual to be able to make decisions for themselves and do things on their own behalf, whether it be financial or medical.
  • Individuals may or may not have the capacity to sign a POA. The determination is made by the attorney. 
  • With a POA, nobody’s rights get taken away, but with a guardianship hearing, the incapacitated individual could lose their rights. Always try to get a POA first, because a guardianship is hard to remove once it’s in place.
  • Sometimes we’re forced to do a guardianship hearing because individuals are susceptible to their money being stolen and are in a position where we need to protect them with a guardianship.

Takeaway 2: Third-party special needs trusts 07:26

  • How do we give money to an individual with a disability? 

Takeaway 3: Standalone special needs trusts 11:24

  • Standalone special needs trusts are funded in the present. They have their own employer identification number (EIN), you can put money into them and your family can put money into them. 
  • The advantage of waiting to contribute money until death is that you don’t have to worry about filing tax returns or getting a separate tax EIN number, but it’s totally your call.

Takeaway 4: First-party special needs trusts 12:19 

  • If you have a disability and you are receiving public benefits, but you have too much money in your, you have to do something with it. That’s where first-party special needs trusts come in.

Takeaway 5: Able accounts14:31

  • Over time, the federal and state governments decided that they didn’t like the process of individuals with disabilities who might be making too much money every month hiring lawyers and paying thousands of dollars for a special needs trust, so they created an ABLE account. 
  • ABLE = Achieving a Better Life Experience

Takeaway 6: Pulled trusts 19:57 

  • Another available substitute for a first-party special needs trust is a pulled trust.

Links and Resources Mentioned

Bellomo & Associates workshops: https://bellomoassociates.com/workshops/ 

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