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If you have a qualifying disability or are helping a loved one who does, one of the most helpful assets at your disposal can be a special needs trust, or SNT. A special needs trust gives you the ability to protect your assets while also preserving your ongoing governmental benefits, including Supplemental Security Income (SSI) and Medicaid benefits. If you’ve never put one together before, you may be wondering how to fund a special needs trust in Florida.
As you work through the establishment of a special needs trust, you may want to consider hiring a Florida special needs trust attorney to assist you. Working through special needs trust cases on your own can be daunting and hard to understand, as can the state’s special needs trust laws. Having the right legal support in your corner can make all the difference. Douglas A. Oberdorfer has significant litigation and negotiation experience that he can bring to your situation.
How to Fund a Special Needs Trust in Florida?
Before you can fund your special needs trust, it’s important to know which kind of trust you are establishing. The rules are different depending on whether your trust is a first-party trust, a third-party trust, or an ABLE account. If you choose to set up an ABLE account, you can only do so if your disability manifested before you turned 46 years old.
Additionally, you can only set up a special needs trust if your disability is expected to last longer than 12 months or end in your eventual death. Your condition must also qualify under the Social Security Administration’s definition of a long-term disability. Here are the various ways you can fund a special needs trust in Florida:
Funding a First-Party Trust
This type of trust is established using the beneficiary’s own money and assets. Under federal and state regulations, a first-party trust is required to have a Medicaid payback provision in which all remaining funds in the trust must be used to reimburse the state for Medicaid expenses when the beneficiary passes away. Common funding methods include:
- Direct transfer of settlements: If the beneficiary receives a personal injury or medical malpractice settlement, those funds can be placed directly into the SNT.
- Transfer of inheritance: If any family members mistakenly leave an inheritance to a disabled loved one instead of putting it in a third-party trust, the funds can be moved to a first-party trust instead.
Funding a Third-Party Trust
A third-party trust is funded from other sources, usually the beneficiary’s family, and does not require a Medicaid payback provision. Common funding methods include:
- Life insurance: You can name the trust itself as the beneficiary of your life insurance policy.
- Wills: You can also name the trust as the beneficiary of your last will and testament or in a revocable living trust.
- Lifetime gift: Family members can also gift assets to the trust during their lifetimes, or name the trust as the beneficiary of a retirement account.
Hire a Special Needs Trust Lawyer Today
The most important decision you can make for your case is to hire a special needs trust lawyer to oversee the creation of your SNT and help you secure assets. At the Law Office Of Douglas A. Oberdorfer, P.A., we can make sure your case is handled with care. Contact us to speak with a valued team member about your options.
