a family that is thinking about creating a special trust in texas
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By Carey Thompson
Founding Attorney

Creating a Special Needs Trust can be an important step in securing a stable financial future for a loved one with special needs. It provides a way to ensure their well-being and care without risking their eligibility for essential government benefits. This type of trust balances long-term support with necessary legal requirements and is a key tool for you to consider in your family’s planning.

Understanding Special Needs Trusts

A Special Needs Trust is a legal arrangement designed to benefit an individual with disabilities. This trust allows assets to be held on behalf of the beneficiary, ensuring they receive essential care and resources without disqualifying them from government aid like Medicaid or Supplemental Security Income. Unlike traditional trusts, a Special Needs Trust focuses on providing supplemental support that covers costs beyond what government programs offer, ensuring a higher quality of life. 

When You Should Consider a Special Needs Trust

Considering a Special Needs Trust is a good idea when planning for the financial future of a loved one with disabilities. It becomes particularly relevant if you anticipate leaving assets to them, either through inheritance or a life insurance policy. This trust ensures that these assets don’t impact their eligibility for vital government benefits. Families should think about this option if they are seeking to provide long-term financial support without hindering access to public assistance programs that are often necessary for their loved one’s well-being.

Key Legal Steps in Setting Up a Special Needs Trust

  • Choosing the Right Type of Trust: Begin by deciding between a third-party and first-party Special Needs Trust. A third-party trust is funded by someone other than the beneficiary, usually a family member, while a first-party trust is funded with the beneficiary’s own assets, often received from an inheritance or settlement.
  • Selecting a Trustee: Carefully choose a trustee who will manage the trust’s assets and make distributions on behalf of the beneficiary. The trustee should be someone responsible and trustworthy, with a good understanding of the beneficiary’s needs and the legal obligations of managing a trust.
  • Drafting the Trust Document: Work with an experienced attorney to draft the trust document. This document should outline the terms of the trust, including the purpose, beneficiary, trustee powers, and how the trust assets can be used. It must comply with state and federal laws to ensure it does not jeopardize the beneficiary’s eligibility for government benefits.
  • Funding the Trust: Once the trust is established, it needs to be funded with the assets intended to support the beneficiary. This can include money, property, stocks, or other valuable assets. The funding process varies depending on the type of assets and the structure of the trust.

Important Considerations and Requirements

When setting up a Special Needs Trust in Texas, you must be mindful of both state-specific legal requirements and broader considerations. First, ensure the trust explicitly states its purpose to supplement, not replace, government benefits, thus preserving the beneficiary’s eligibility. It’s important to accurately detail the beneficiary’s needs and how trust funds should be used, as misuse can lead to loss of benefits. Additionally, stay informed about changes in state and federal laws that might affect the trust. Regular reviews and updates to the trust document may be necessary to align with such changes. Lastly, consider the long-term impact of the trust, including tax implications and the future financial needs of the beneficiary, to ensure the trust remains effective over time.

How We Can Help You

At the Law Office of Carey Thompson, we offer dedicated support in creating and managing Special Needs Trusts. Our team brings in-depth knowledge of Texas laws and a compassionate approach to each case, ensuring your trust aligns perfectly with your family’s unique needs. From drafting precise legal documents to guiding you through funding and administration, we make the process smooth and stress-free, while safeguarding your loved one’s financial future.

Contact an Experienced Texas Special Needs Trust Attorney

We’re here to assist in setting up a Special Needs Trust tailored to your family’s needs. Let us help you secure the future of your loved one. Contact the Law Office of Carey Thompson today for a consultation.

About the Author
Carey Thompson has been practicing Social Security Disability Law Since 2008 after he graduated from Texas Wesleyan School of Law, now known as Texas A&M school of Law in Fort Worth, TX.  While at Texas Wesleyan he served on Law Review.  Prior to going to Law School, Mr. Thompson was a High School Band Director for four years using his degree in Music Education from Michigan State University.  Prior to Attending Michigan State, he attended Aledo Schools from Kindergarten to graduate.  Mr.Thompson feels strongly about serving the people of Tarrant County.