Special Needs Trust Lawyers in Nashville, Tennessee

Planning for a loved one with special needs requires careful consideration, particularly when it comes to protecting their financial future. A special needs trust provides a way to set aside assets without jeopardizing eligibility for essential government benefits like Supplemental Security Income (SSI) and Medicaid.

Brazil Clark, PLLC assists families in creating trusts that preserve financial stability while maintaining access to essential support programs. The firm's estate planning services in Nashville can give you peace of mind knowing that your loved one’s care and well-being are protected for years to come.

The firm clients in Nashville, Tennessee, and Rutherford County, helping them make informed decisions for their loved ones' futures. Contact Brazil Clark, PLLC for assistance creating a special needs trust.

The Importance of a Special Needs Trust

Caring for a loved one with disabilities comes with unique financial and legal challenges. Many individuals with special needs rely on government assistance programs to cover medical care, housing, and daily support. However, receiving a lump sum inheritance or financial gift could disqualify them from these crucial benefits.

A special needs trust ensures they have access to additional financial resources while remaining eligible for public assistance.

A properly structured trust allows families to safeguard assets without interfering with government aid. Whether planning for a child, sibling, or other dependent with disabilities, establishing a special needs trust as part of estate planning in Tennessee provides a long-term solution that prioritizes financial security and peace of mind.

What Is a Special Needs Trust?

A special needs trust is a legal arrangement that holds assets for an individual with disabilities without affecting their eligibility for government benefits. These trusts are designed to supplement, rather than replace, public assistance programs by covering expenses that enhance the beneficiary’s quality of life.

Key expenses a special needs trust can cover include:

• Medical and dental care: Services not covered by Medicaid or other insurance plans.

• Housing and utilities: Rent, home modifications, and adaptive equipment.

• Education and training: Tuition, books, and specialized learning tools.

• Recreational activities: Travel, entertainment, and social outings.

• Transportation: Adaptive vehicles and ride services.

• Personal care and therapy: Caregivers, physical therapy, and other wellness services.

By structuring a trust properly, families can provide financial support without putting government benefits at risk. This approach to estate planning in Nashville allows individuals with disabilities to maintain a comfortable and fulfilling lifestyle while securing future financial stability.

Types of Special Needs Trusts

Not all special needs trusts are the same. The right trust depends on factors such as who is funding it and how the assets are managed. The three main types include:

First-Party Special Needs Trust

A first-party trust, also known as a self-settled trust, is funded using the assets of the person with disabilities. This type of trust is often used when the beneficiary receives an inheritance, personal injury settlement, or other financial windfall.

Important considerations for first-party trusts:

• Must be created before the beneficiary turns 65

• Requires a Medicaid payback provision, meaning any remaining funds must be used to reimburse Medicaid upon the beneficiary’s passing

• Provides financial security while preserving benefits

• Protects the beneficiary’s ability to receive SSI and Medicaid

• Must be established by a parent, grandparent, legal guardian, or the court

First-party trusts are a powerful tool for ensuring the financial well-being of individuals with disabilities while maintaining their access to vital benefits. Properly establishing and managing these trusts is essential to meet both legal and personal needs effectively.

Third-Party Special Needs Trust

A third-party trust is funded by someone other than the beneficiary, typically parents or other family members. These trusts don’t require a Medicaid payback provision, making them a more flexible option for long-term planning.

Advantages of third-party trusts:

• No Medicaid payback requirement

• Can hold various assets, including real estate, life insurance proceeds, and investments

• Allows families to provide long-term financial support while making sure funds are used appropriately

• Flexible planning tool for parents and guardians

• Protects financial gifts and inheritances from being counted as personal assets

Third-party trusts offer a dependable way to secure financial stability for a loved one while maintaining eligibility for government benefits. They are a strong tool for families seeking to balance care, resources, and long-term planning needs.

Pooled Special Needs Trust

A pooled trust is managed by a nonprofit organization and combines assets from multiple beneficiaries. Each individual has a separate account, but funds are pooled for investment purposes.

Benefits of a pooled trust:

• Lower administrative costs compared to private trusts

• Managed by professional trustees with experience handling special needs assets

• Accessible for individuals who don’t have a family member to act as trustee

• Offers professional management with a structured disbursement plan

• Maintains eligibility for public benefits while providing additional financial support

Choosing the right type of special needs trust is an essential part of estate planning in Nashville, as each option has distinct advantages based on the beneficiary’s situation and long-term needs. The attorneys at Brazil Clark, PLLC can help you choose the right trust for your situation.

What a Trustee Does

A trustee is responsible for managing the assets in a special needs trust and distributing funds according to the beneficiary’s needs. This role carries significant responsibility, as improper use of funds can impact eligibility for government programs.

Key responsibilities of a trustee include:

• Investing trust assets wisely to provide long-term financial stability

• Distributing funds in a way that doesn’t jeopardize benefits

• Keeping detailed financial records and filing necessary tax documents

• Verifying compliance with state and federal laws governing special needs trusts

Families often choose a professional trustee, such as a bank or legal professional, to handle the trust administration. However, a family member can also serve as a trustee if they are prepared to manage the responsibilities effectively.

How a Special Needs Trust Fits into Estate Planning

A well-structured special needs trust is just one component of a broader estate plan. By incorporating a trust into an estate plan, families can make sure their loved ones are cared for without unnecessary legal complications.

Key elements of estate planning in Nashville for families with special needs include:

• A last will and testament: Directs how assets should be distributed and can specify funding for a special needs trust.

• A durable power of attorney: Grants authority for financial decisions if the individual becomes unable to manage affairs.

• Healthcare proxy: Appoints a trusted person to make medical decisions on the individual’s behalf.

• Guardianship considerations: Identifies who will care for the person with special needs if parents or primary caregivers are no longer able to do so.

Taking a comprehensive approach to estate planning in Nashville helps make sure that all aspects of a loved one’s future are accounted for, from financial security to personal care decisions.

Protecting Public Benefits While Securing Financial Stability

The primary reason for establishing a special needs trust is to protect access to public benefits while providing supplemental financial support. Government assistance programs like SSI and Medicaid have strict income and asset limits, and receiving direct financial gifts or inheritances could disqualify an individual from these crucial programs.

Ways a special needs trust protects public benefits:

• Keeps assets out of the beneficiary’s name, preventing disqualification

• Allows controlled distributions for expenses that enhance quality of life without replacing government benefits

• Provides long-term financial planning to maintain stability after parents or caregivers pass away

Without proper estate planning in Nashville, a well-meaning financial gift could unintentionally leave an individual ineligible for essential healthcare and assistance programs. A special needs trust helps avoid this risk while providing much-needed financial security.