"Buying Real Estate Using a Special Needs Trust"

If you set up a special-needs trust for a loved one, there is a good chance that after your death you will provide a large amount of money to the trust. There are several methods, such as person designation. For more general information about Special Needs Trusts, please visit the Special Needs Trusts section of Nolo.com . Note: If you would like to fund a lifelong special needs foundation, please consult a professional. Unless you have a specific reason to put your assets in a special needs trust for the rest of your life, you should not do so as there may be gift tax implications. Throughout your life, you can use money in your name to care for loved ones with special needs. Therefore, there is little need to fund a special needs foundation before you die. If you believe you will need to add money to your trust while it is alive, you should consult a tax advisor or certified public accountant to fully understand the gift tax implications. Wills The best-known document for estate planning is the will. It is relatively easy to create and can be used to indicate assets that you would like to leave to the Special Needs Trust. A will can bequeath almost any type of property, including bank accounts, homes, businesses, all types of personal property, and intellectual property (patents, copyrights, trademarks). You can write your own will or you can get the help of a lawyer. You can always change it or create a new one. A major drawback to using a will is that your property may be retained in probate proceedings after your death. With a few exceptions (for example, many states have simplified probate laws for small properties), the probate process can take months and cost thousands of dollars. there is. This could delay funding for the Special Needs Trust and reduce the amount available to dependents. To avoid these issues, consider using a revocable living trust instead. For more information on Wills, including how to create one, visit the Wills section of Nolo.com . Revocable Living Trusts Similar to wills, living trusts can be used to fund special needs trusts that become effective upon death. A trust document lists trust property that should be sent to the trust property rather than directly to the beneficiary. A simple revocable living trust works in the same way as a will to distribute property after your death. But trusts have one big advantage over wills. Property not held in a revocable living trust or property not validly transferred falls within the terms of your will. This is exactly why most people with a living trust create a will-to dispose of property that has not been transferred or otherwise bequeathed to the living trust. For more information on revocable Living Trusts, please visit the Living Trusts section of Nolo.com . Beneficiary Designation You can also use Beneficiary Designation to deposit assets in a special needs trust. Bank and Brokerage Accounts Retirement Benefits (IRAs, 401(k) Plans) Securities Certificates of Deposit and Life Insurance Fund owners simply use a form provided by the fund or securities manager to determine who will receive their estate after death. This ensures that the designated beneficiary (or a special needs trust, if desired) receives the property without the estate. In some states, a "death transfer" may also be used to transfer property without property to a designated beneficiary upon your death. See Nolo.com Real Estate Death Certificates for more information. If you find a special needs trust using beneficiary designation, please designate that trust as the beneficiary, not the dependent. (Giving property directly to a loved one may disqualify you for SSI or Medicaid. ) Note: Some Trustees Need Special Assistance for Retirement Plan " Designated Beneficiaries " If so, consult a real estate planning attorney or tax expert. conduct. While making a trust a "designated beneficiary" of an IRA can add significant benefits to a special needs trust, the trust must meet some specific rules. Do not trust beneficiary property Your loved one may acquire property of his own-perhaps a personal injury settlement or an inheritance from her relatives. At first glance, it may seem like a good idea to put this money directly into an existing special needs trust so that it counts as a beneficiary resource and is not blocked from getting SSI . bad idea. In fact, adding a beneficiary's own property to a special needs trust can disqualify dependents from SSI and Medicaid. Because if the beneficiary's own property is mixed with the property you left in the special needs trust, it can all be considered the beneficiary's resources. Also, if the total is limited to the resource limit (currently $2,000), the beneficiary is ineligible for benefits.

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Prepared by: Attorney Robert Crowder Jr