What is a special needs trust?

A special needs trust (SNT) is a type of trust created to help individuals with disabilities to maintain their quality of life. It is designed to provide financial assistance to individuals with disabilities beyond the assistance they may receive from governmental programs such as Supplemental Security Income (SSI) and Medicaid. An SNT is set up for the benefit of an individual with special needs to provide for their care and quality of life. In Virginia, a special needs trust is created for the benefit of an individual with a disability, such as a mental or physical disability, or a developmental disability. The trust holds funds to provide for the special needs of the individual beyond what governmental programs can provide. An SNT is typically funded with the individual’s own assets, such as an inheritance, a settlement, or proceeds from a life insurance policy. The trust may also be funded by a gift from another person or an organization. The funds held in an SNT are used exclusively for the benefit of the beneficiary with special needs. The trust may be used to pay for services, supplies, medical care, or other items that enhance the beneficiary’s quality of life. An SNT may also be used to pay for educational expenses. Funds in the trust are not counted as the beneficiary’s assets, as long as it is managed properly to ensure that the funds are being used for the benefit of the beneficiary. In Virginia, special needs trusts must meet certain requirements in order to be valid. These requirements vary from state to state. In Virginia, the trust must be carefully drafted and managed to ensure the beneficiary’s eligibility for governmental assistance. An experienced trusts and estates attorney can help ensure that the trust meets all applicable legal requirements.

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