Elder Law attorneys, in Idaho, commonly draft a Third-Party Special Needs Trust for a person with disabilities. It is established by a third party with assets of the third party for the benefit of the person with disabilities. An example of this would be that a parent of a Downs Syndrome child, as part of the parent’s estate plan, would establish a Special Needs Trust for the benefit of the child. The assets funding the trust are assets of the parent, who is the third party.
In drafting the Third-Party Special Needs Trust, it is not necessary to be concerned with Medicare claims, Medicaid liens or age limits relating to the beneficiary. There is no requirement that the state Medicaid agency be paid back funds on the death of the beneficiary. However, the income of the trust must not be considered available to the beneficiary or the income may push the beneficiary over the public benefit income limit and disqualify the beneficiary from receiving benefits. Similarity, the assets in the trust must not be available to the beneficiary.
There is great flexibility in structuring the trust to achieve the income gift and estate tax goals of the grantor of the trust. Tom Packer is an Elder Law attorney that handles Special Needs Trusts. Contact his office at 785-5600 for more information.