Special Needs Trust in Michigan - Collens Estate Law

A trust is a flexible legal tool that’s essential to good estate planning. Offering a range of benefits, trusts help simplify asset management and make it easier for individuals to eventually pass on assets according to their specific wishes.

One type of trust that is less known than the standard variety is the Special Needs Trust (SNT). Understanding the purpose of this trust could help save your family when circumstances require extra protection for a loved one.from unnecessary hardship in the event of a tragedy.

What is a Special Needs Trust?

An SNT helps ensure that a person with disabilities continue to receive living needs and health care if you should predecease them or if you can no longer provide financial support. Another important benefit of an SNT is that it can hold funds without jeopardizing your loved one’s eligibility to receive vital government benefits.

Attorney Howard H. Collens has extensive experience helping families establish trusts that meet their individual needs. His expertise in trust-related matters includes:

Drafting a Special Needs Trusts Document
Serving as an SNT trustee
Court-appointed trusteeship
Conservatorship
Guardianship

Contact a Lawyer

Schedule a consultation with one of our experienced attorneys to discuss your legal needs and get personalized advice. Call (248) 545-2500.

Types of Trusts for Special Needs

The two most common trusts used in estate planning for individuals with special needs are First-party and Third-party Special Needs Trusts.

First-party Special Needs Trust: Also referred to as a self-settled SNT, the First-party SNT is created with assets owned by the beneficiary, such as those received as an inheritance. While protecting these assets, the trust still allows your loved one to qualify for benefits such as Medicaid or Supplemental Security Income.

Third-party Special Needs Trust: This type of trust is established by someone other than the beneficiary. This could be a family member, parent, guardian, or court. Unlike First-party SNTs, there is typically no obligation to pay back Medicaid upon the death of the beneficiary. Instead, funds that remain can be allocated to other beneficiaries or charitable organizations.

First-party and Third-party SNTs are subject to both Federal and State rules and regulations. For this reason, it’s essential to work with an attorney experienced in special needs planning. The attorneys at Collens Estate Law, for example, work to ensure compliance with applicable laws while tailoring the trust to serve the unique requirements of the beneficiary and their family.

Both types of trusts can assist the beneficiary by providing for a wide range of expenses, including:

Medical and dental care
Therapy expenses
Education expenses
Utility costs
Transportation expenses
Travel expenses

Benefits of Special Needs Trusts

It’s difficult to overstate the value an SNT can provide when it comes to safeguarding the future of a loved one with special needs. A well established and managed SNT will provide a number of important benefits, including:

Protecting Eligibility for Public Benefits: As previously stated, an advantage of an SNT is that it allows the beneficiary to retain access to crucial public benefits such as Medicaid and Supplemental Security Income. This is an important feature because in the absence of an SNT, receiving an inheritance or other types of assets could result in your loved one losing eligibility for these benefits.
Providing for Supplemental Needs: In addition to protecting eligibility for public benefits, an SNT can also enhance the quality of life for your loved one with special needs by paying for specialized equipment and home modifications. These costs are typically not covered under government programs.
Avoiding Probate Court: Establishing an SNT ensures that assets in the trust are exempt from probate–the legal process of distributing the assets of a deceased person. This not only expedites the process of delivering assistance to the beneficiary, but it also ensures that your loved one’s matters remain private and away from the court.

Guidance for Trustees

The Trustee is the individual in charge of managing the trust’s assets and making sure that they are used to benefit the person with special needs. The trustee also has a fiduciary obligation to comply with the terms of the trust. Given the importance of these responsibilities, trustees often seek the guidance of an experienced estate law professional—like those at Collens Estate Law.

If you are nominated as a trustee for a SNT, we’ll explain the relationship between you, the family, the beneficiary, and the various governmental agencies. We’ll help protect your rights should there be a challenge from a family member.

Contact Our Attorneys

Schedule a consultation with one of our experienced attorneys to discuss your legal needs and get personalized advice. Call (248) 630-3493.

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Setting Up a Special Needs Trust

Developing a Special Needs Trust in Michigan entails a process designed to ensure the needs and legal requirements of the trust are met. This process typically includes the following steps:

Select the type of trust: Choose between a First-party Trust (set up with the beneficiary with the beneficiary’s assets) and a Third-party Trust (set up by others). Consider the trust that works best for your situation, as this is not a one-size-fits-all decision.
Gather Information: Take note of your loved one’s financial situation and specific requirements. Consider their medical needs, living arrangements, financial situation, and future care plans.
Choose a trustee: Look for a person who is reliable, trustworthy, and understands the beneficiary’s needs. Equally important, this person should also genuinely care about the future of your loved one. Serving as a trustee is a very important responsibility, so choose wisely.
Hire an attorney: SNTs can get complicated and Michigan has rules of it’s own. To navigate the process effectively, it’s a good idea to work with an trust law attorney experienced in special needs planning. This will help ensure the trust is customized to your loved one’s needs.

Contact Our Attorneys to Learn More About Special Needs Trusts

Collens Estate Law has the experience and expertise to handle all aspects of establishing and administering a SNT. To learn more, schedule a consultation with one of our SNT attorneys or call 248-630-3493. From our offices in Huntington Woods, our lawyers represent clients in the Detroit metro area and across the state of Michigan.