Bay Area Estate And Tax Planning Law Firm

Considerations for a special needs trust

On Behalf of | Dec 29, 2021 | Trusts |

The key aspects to consider before forming your special needs trust are fiduciary duties and who will perform them. In California, you have a right to set aside funding for the future care of any beneficiary you name. Beneficiaries with disabilities face a threat to their quality of life if their parents pass at an earlier-expected time. To make sure that a beneficiary continues to receive care, a trust can be funded to prepare for their future. Here are some considerations.

What are the costs of special needs?

Knowing the cost of the special or medical care that someone needs is your first step. Before relying on the scope of a special needs trust, you need enough money to get it started. What someone requires over a lifetime should be a point of interest. You then want to decide how to diversify your assets to make sure that your monthly care costs are covered. Additional fiduciary duties can be achieved by a financial advisor or an accredited attorney you choose.

Who will be the trustee?

Every trust has a beneficiary, a grantor who created the trust and a trustee. A trustee with fiduciary duties is advantageous because they protect your beneficiaries’ interests. The assets in your trust, though belonging to someone you name, only get withdrawn when a trustee, after assessing things, grants your beneficiaries their wishes. Having a trustee as a mediator between money and a disabled child can ensure that your money is put to good use.

Fiduciary duties in California

Now is the time to truly consider how your special needs trust will be funded. Though you can grow a special needs trust with investment assets, an initial, lump-sum needs to be deposited. Consider building your trust with common wages, tax returns or personal inheritances.