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Family Business Institute a Leading Succession Planning Firm for Familyowned...

At a recent workshop on succession planning for family-owned businesses, Don Schwerzler, founder of the Family Business Institute in Atlanta and its Internet organization Family Business Experts, urged parents of a disabled child to investigate the benefits provided by a Special Needs Trust. "The Special Needs Trust can help protect a disabled child", explained Schwerzler.



Schwerzler continued, "A Special Needs Trust, sometimes called a Supplemental Needs Trust, is used to benefit a person with a disability. The trust provides instructions on how to manage money that is being set aside to help care for a disabled person."



Special Needs Trusts must meet certain requirements that include: the monies be used to "supplement" the care of a disabled person and not to "support" a disabled person; the monies in the Special Needs Trust are managed by a trustee and not by the disabled person; and the Supplemental Needs Trust is irrevocable - that is the settlor cannot undo it, nor benefit from the assets, nor tell the Trustee how to manage the trust.



Schwerzler went on to explain the advantages to creating a Special Needs Trust.



These Trusts allow an unlimited amount of money to be held for the benefit of a disabled person without disqualifying the disabled person from benefits provided by federal and state support programs.



This is important because programs such as Medicaid can not be used if the disabled person has assets worth more than $2000.



Moreover, if a disabled person on Medicaid were to inherit a sum of money beyond that $2,000 threshold, the inheritance could disqualify the disabled person from Medicaid benefits until after the inheritance has been completely used up.



With a Special Needs Trust, the money in the trust is available to help a disabled person but the funds in the Trust are not considered an asset of the disabled person.



There are no limits to the amount of money that can be held in a Special Needs Trust - and the money can come from anyone, including parents, grandparents, family members and friends - even strangers who might care to contribute.



The Special Needs Trust is not just for money. The Trust can own a house or vehicle that would otherwise disqualify the disabled person from receiving benefits from the government.



Schwerzler cautioned "creating a Special Needs Trust is not a do-it-yourself project - you need to retain the services of an attorney who is knowledgeable about Trusts."



Schwerzler suggested that if you are a parent of a disabled child or an advisor to a family with a disabled child, you can learn more about Special Needs Trusts on our web site.



We also offer information about a wonderful resource on Special Needs Trusts, Planning For the Future. First published in 1993, the Fifth Edition has now been released. Co-authors L. Mark Russell and Arnold Grant are nationally recognized experts in tax and estate planning for parents who have a child with a disability.



Both men are attorneys whose expertise with Special Needs Trusts is based on personal experience with a family member with a disability. Schwerzler noted both men were recently interviewed in Understanding Family Business, an e-zine published by the Family Business Institute in Atlanta.

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