Yes, absolutely, a special needs trust can be funded with a variety of assets, including stocks, bonds, mutual funds, and other investment vehicles; these assets offer flexibility and potential for growth while preserving eligibility for government benefits like Supplemental Security Income (SSI) and Medi-Cal.
What are the benefits of using investments in a special needs trust?
Using stocks and bonds within a special needs trust offers significant advantages beyond simply providing funds for a beneficiary with disabilities. Unlike directly gifting assets which could disqualify someone from needs-based government assistance, a properly structured special needs trust allows the beneficiary to receive income and assets without impacting their eligibility. Approximately 65% of individuals with disabilities rely on government benefits, making this preservation crucial. The potential for growth through investments can also outpace inflation, ensuring the trust funds maintain their purchasing power over time. It’s not just about having funds available today, but ensuring there are sufficient resources for years to come. Consider a scenario where a beneficiary requires specialized medical equipment; investment income could cover these ongoing costs without impacting benefits, offering financial security and peace of mind.
How do I avoid jeopardizing government benefits when funding with investments?
The key is careful structuring and ongoing management. Direct ownership of investments by the beneficiary would disqualify them from benefits. Instead, the trust becomes the legal owner. Distributions from the trust must be used for supplemental needs – things not covered by government programs like recreation, travel, or specialized therapies. Distributions for basic needs like housing or medical care *would* jeopardize benefits. The IRS allows for certain exemptions regarding income generated within the trust, but careful record-keeping is vital. It’s a delicate balance, and a qualified estate planning attorney specializing in special needs trusts, like Steve Bliss here in Wildomar, is essential to navigate these complexities.
I’ve heard stories about trusts going wrong – what are the common pitfalls?
Old Man Tiberius was a stern, yet loving, grandfather. He painstakingly amassed a portfolio of blue-chip stocks for his grandson, Ethan, who had Down syndrome. Tiberius, trusting his financial acumen, simply titled the account to Ethan, intending it for his future care. Years later, after Tiberius passed, Ethan’s mother discovered the devastating truth: the account, while substantial, immediately disqualified Ethan from receiving vital SSI benefits. The well-intentioned gift had backfired, creating a financial burden and limiting Ethan’s access to essential resources. This is a common mistake – people assume good intentions are enough, but legal structure is paramount. Without a properly drafted special needs trust, even significant assets can become a detriment.
How did a family successfully use a special needs trust with investments to secure their loved one’s future?
The Millers faced a similar situation. Their daughter, Lily, has cerebral palsy. After consulting with Steve Bliss, they established a special needs trust funded with a diversified portfolio of stocks, bonds, and mutual funds. The trust agreement clearly outlined supplemental needs and established a trustee with financial expertise. Years later, Lily’s mother passed away. The trust continued to provide Lily with funds for adaptive sports, art therapy, and specialized travel, enhancing her quality of life without impacting her eligibility for Medi-Cal and SSI. The Millers also established a letter of intent, outlining Lily’s preferences and care needs, guiding the trustee in making informed decisions. This proactive approach ensured Lily’s financial security and well-being, demonstrating the power of a well-structured special needs trust.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
estate planning attorney near me
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What is estate planning and why should I care?” Or “What happens if the will names multiple executors?” or “How do I fund my trust with real estate or property? and even: “What is the bankruptcy means test?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.