Special Needs Trusts in Colorado
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A special needs trust, also referred to as a "supplemental needs trust," is a type of living revocable trust or irrevocable trust. The purpose of this document is to provide funds to a disabled beneficiary, typically a child or grandchild, without disqualifying him or her from receiving government assistance, such as Medicare, Medicaid, and Social Security disability. Typically, the assets are not transferred to the disabled beneficiary until the death of the Grantor, however transfers can be made during their lifetimes.
In order for your trust to qualify as a special needs trust, the beneficiary must not have any right to the income or principal from the trust without the approval of the Trustee. In turn, the trust is forbidden to distribute funds if the disbursal would disqualify the beneficiary from receiving government assistance.
The Purpose of Special Needs Trusts
Special needs trusts are not intended to pay for the basic needs of the beneficiary. Rather, they are intended to enrich the disabled person's life by funding the purchase of luxury items that are not permitted or covered by the government program.
Such trusts typically provide funds for things such as:
- Elective medical procedures
- Recreational activities
All parents of special needs children should consider establishing a special needs trust for the benefit of their child. A creative trust ensures peace of mind for the parents by making sure that the needs of their child will be met even after they are gone.
Are You Considering a Special Needs Trust?
The Denver estate planning attorney at James A. Littlepage Law Offices provides excellent legal counsel to clients throughout Colorado. Attorney Littlepage has more than 40 years of legal experience, and can help you draft a special needs trust that suits your family's unique situation.