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IL Special Needs Trusts / Supplemental Needs Trusts

Assisting individuals and families with special needs planning, special needs trusts and guardianships in Lincolnshire, Libertyville and Vernon Hills, as well as Lake, Cook and Will Counties in IL.

Anyone caring for a special needs child or adult needs to give some serious consideration to implementing legal planning for that individual’s future. The primary document that is used in such planning is a special needs trust, or a supplemental needs trust (in Illinois this is sometimes called a “15.1 trust” because of the number of the state statute). A special needs or supplemental needs trust is designed to hold money for a special needs individual’s benefit, while not disqualifying them from receiving government benefits such as Medicaid or Supplemental Security Income (SSI).

Federal and state governments will pay for many or most of a disabled individual’s expenses. However, that disabled beneficiary can’t have assets in his or her own name of over $2,000, although there are exemptions for a home, a car, and other basic items. Therefore, what sometimes happens with a special needs person is that a well-meaning loved one, such as a grandparent, will leave a bequest in a will to that person, thinking the person will benefit by any extra financial help the grandparent gives.

However, what happens in actuality is the individual is disqualified from receiving government benefits until those assets are spent. Instead, the loved one should have either set up a stand-alone special needs trust or a testamentary (contained in a will) special needs trust. That trust could then provide for any extra expenses that would help make that disabled individual’s life better, while still allowing the individual to receive government benefits.

There are restrictions on special needs trusts. The disabled person cannot have too much control over the trust, such as by serving as trustee. Adding an independent person as the trustee will also help beneficiaries who can’t manage money or don’t have any concept of money. A relative or a parent could be a trustee, or it may be more advisable to name a professional adviser to serve as trustee. The trustee should be an individual who can communicate with the special needs individual, as well as work closely with medical professionals and the government red tape involved.

Another document that can be vital for future caretakers of special needs is a letter of intent, which can spell out everything a future caregiver needs to know about the special needs individual’s specific situation. This letter can include the medical history of the individual, the future medical diagnosis, medications and treatments, likes and dislikes, and anything a caregiver would need to know that a disabled person may not be able to communicate. This letter should be updated every year or as the situation changes. It can be invaluable to caregivers.

Another important thing to think about when setting up a special needs trust is communicating about how important the coordination of estate plans is with other family members. If a parent decides to go to the expense of setting up a special needs trust for a child, the parent should let other family members know. When those other family members do their estate planning, if they want to leave a bequest to that disabled individual, rather than establishing their own trust, they could leave the bequest to the already established trust. This will greatly reduce expenses and the complexities involved in having multiple small trusts in place.

 


Waypoint Estate and Business Planning assists clients in the greater Chicago area including Lincolnshire, Mundelein, Vernon Hills, Lake Bluff, Grayslake, North Chicago, Lake Forest. Gurnee, Libertyville, Long Grove, Lake Zurich, Buffalo Grove, Northbrook, Deerfield, Glenview, Naperville, Wheaton, Yorkville, Algonquin, Huntley, Crystal Lake, Winnetka, Hawthorn Woods, Wilmette, Skokie, Wauconda and Wadsworth in Lake County, Cook County, DuPage County and McHenry County, Illinois.



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