Many of us have family members or close relatives with disabilities. We'd like to leave some of our belongings to help out this family member, but we're not sure how best to do it. Should we just give open gifts? What about trust? Let's look at some options.
Since you may not need the income verification benefits today but may need them in the future, it's safest to leave your donations in escrow. The trustee holds your money, invests it and, if necessary, distributes it to your intended recipients without compromising assistance.
Such trusts are called Special Needs Trusts or Additional Needs Trusts because they are intended to supplement, not replace, government benefits. It can be created today and funded now with money or other assets.
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You can act as a guardian or allow someone else to act as a guardian; Trust is revocable or irrevocable, and you may retain the power to change the final distribution of the trust property or not. All of these decisions affect the treatment of income tax and property tax trustees.
If you choose to make the trust irrevocable, it will be assigned its federal tax number. Number and can be set for either you, the trust itself, or the beneficiary tax.
You can also build trust in your will to be funded after you die. Such a trust is called a “treasury trust”. In this case, you will not have a separate trust document as the terms of the trusteeship are contained in the will itself.