- Special needs trust
A special needs trust is created to ensure that beneficiaries who are
disabled ormentally ill can enjoy the use ofproperty which is intended to be held for their benefit. In addition to personal planning reasons for such a trust (the person may lack the mental capacity to handle their financial affairs) there may befiscal advantages to the use of a trust. Such trusts may also avoid beneficiaries losing access to essential governmentbenefits .A trust for a disabled beneficiary may be set up in any of the
common law countries or other countries which recognise the concept of the trust. They have particular advantages in legislation in relation to bothtaxation and state benefits in for example Ireland and theUnited Kingdom and in relation to the provision ofhealthcare ,long-term care andnursing home benefits under the state-sponsoredMedicaid welfare system in theUnited States of America .Special needs trusts can provide benefits to, and protect the
assets of, physically disabled ormentally disabled . Special Needs Trusts are frequently used to receive aninheritance orpersonal injury settlement proceeds on behalf of a disabled person or are founded from the proceeds of compensation for criminal injuries, litigation orinsurance settlements.A common feature of trusts in all common law jurisdictions is that they may be run either by family members (a private trust) or by
trustee s appointed by the court. Especially where a trust is to be established for a disabled child or young person, great care is generally taken in the choice of appropriate trustees to manage the trust assets and to deal with future replacement appointments. The use of a private discretionary trust can not only be more efficient in terms of taxation and access to government benefits but can also allow for more efficient investment of funds held than where funds are held by a court official (such as theOfficial Receiver in England and Wales). However where no appropriate trustees can be found, e.g. on the death of existing trustees, the court will intervene.Special Needs Trusts are often set up under the guidance of a
Structured settlement planner in cooperation with a qualified legal and financial team to ensure the trust is set up correctly.Special Needs Trusts are also known as
Supplemental Needs Trust s in the USA and a more detailed article on the US specific characteristics of such trusts, including their interaction with the Medicaid system, is found at that page.
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