Special Needs Planning

Special Needs Planning Attorney in Dedham

Assisting Families with Loved Ones Who Have Special Needs

Parents who have children with special needs have a lot on their plates, leaving them little time to consider their child’s legal planning needs. Like all people, individuals with special needs should have a legal plan in place that allows them to succeed in the future. As such, special needs planning can help individuals keep their need-based government benefits, plan for retirement, manage their investments, receive long-term care, and more.

For these reasons, our special needs planning lawyer helps families throughout Dedham plan for their loved ones’ futures by drafting effective, comprehensive special needs trusts as well as other documents that would protect special needs individuals. Attorney Frederick N. Pellegrini understands how important it is to protect special needs individuals through strategic legal planning because it can set them up for success down the road.

What Is a Special Needs Trust?

A special needs trust (SNT) allows a disabled person to maintain their eligibility for public assistance benefits, despite having assets that would otherwise make them ineligible for those benefits. Special needs trusts are critical in protecting the financial stability and lifestyle of people with disabilities.

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Types of Special Needs Trusts

There are two types of SNTs: First party and third party funded.

First Party Special Needs Trusts

First party SNTS are effective for individuals who have personal assets, inherited assets, or assets from an award or settlement. These SNTs should include federal and state provisions requiring notice and payback to the State when the trust beneficiary dies or terminates the trust during their lifetime.

First party special needs trusts fall under one of two categories:

A (d)(4)(A) SNT, established under 42 USC 1396p(d)(4)(A), can only be established for a disabled individual under 65 years old.
A Pooled Trust applies to a disabled individual of any age but must be established and managed by a non-profit association. The non-profit will maintain a separate account for each beneficiary, but “pool” the funds together for investment purposes.

Third Party Special Needs Trusts

Unlike first party SNTs, third party special needs trusts are funded with assets from a person other than the trust beneficiary. The trust beneficiary does not have possession or legal interest in these assets, as they belong to someone else, such as a family member. As such, the beneficiary cannot add money into a third party SNT.

Note that money in third party SNTs cannot be used for housing or food, as they are considered “basic needs” under federal Social Security laws. Therefore, a beneficiary may suffer a penalty to their public benefits if it is discovered that they are getting free housing or food from elsewhere, including an SNT.

Special Needs Planning Made Easier

An attorney is critical in building an effective special needs plan because they have the insights, experience, and resources required to ensure no stone is left unturned. We understand the importance of using a family-oriented, detailed, and comprehensive approach to these matters, so you can rest assured that at the Law Office of Frederick N. Pellegrini, your loved one’s future will be in good hands.

To learn more about our legal planning services for special needs individuals, please reach out online or at (781) 329-1060!

Estate Planning

Change of Beneficiary

Funding/Titling of Assets into Trusts

Medicaid Planning

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Common Terms in Special Needs Trusts

Over the past 30 years, our clients have found it useful to learn some common terminology that comes up during the special needs planning process, particularly, when creating a trust with the help of their lawyer.

Grantor: Also known as the settlor or trustor, a grantor is the person who creates and funds the trust. Grantors are deemed beneficiaries in firstparty SNTs, unlike for thirdparty SNTs.
Trustee: This is the person or entity who manages the assets in the trust and carries out trust provisions. It is common for a trust to have more than one trustee.
Successor Trustee: Nominated by the trust agreement, a successor trustee is the person or entity who takes over when the initial trustee can no longer serve.
Beneficiary: This is the person who the trust is established for.
Remainder Beneficiary: These are the beneficiaries who receive the remaining assets when a trust ends.
Compensation: Compensation is afforded to trustees for their services and is reported as taxable income.
Trust Estate: A trust estate includes all assets within the trust, including earned income from invested trust assets.
Schedule A: Commonly known as a schedule of assets, Schedule A lays out all assets owned by a trust.
Irrevocable: All first party SNTS are irrevocable, meaning these trusts cannot be changed. However, third partySNTs can be either revocable or irrevocable.
Revocable: As we said before, only third party SNTs can be revocable. A revocable trust allows the grantor to revoke or revise the terms of the trust.
Testamentary: A testamentary trust is created under a last will and testament, therefore, it is not effective until the will creator dies. This can only be applied to third party SNTs.
Inter vivos: Latin for “among the living” or “during life,” an inter vivos trust is established during the grantor’s lifetime. As such, all first party SNTs are inter vivos.
Disability: First party SNT beneficiaries must have certain disabilities to qualify. For information on the disabilities recognized by the Social Security Act (SSA), you should consult with your lawyer.
Bond or Surety: A bond protects trust beneficiaries from potential fraud, negligence, or loss of trust assets by the trustee. Sometimes, courts or Medicaid require the trustee to obtain a bond.