With the average life span of an American with certain disabilities getting longer, the amount of overall care they require could also be on the rise. Taking care of family members in need can be an essential part of estate planning, and setting up the appropriate trust may be the answer.
The life expectancy for a person with Down syndrome has skyrocketed in the last century. While the 1940s saw those with the genetic condition living an average of 12 years, today they might expect to live into their 60s. This is where a thorough estate plan can come into play, with money set aside in a trust offering a strong supporting role. These trusts can take many forms, and choosing the right one for you depends on your aims.
Types of trusts
Sometimes referred to as a living trust, a revocable trust allows you to manage assets that will go to beneficiaries when you pass. You retain ownership of property that falls under the trust until your death, so you can add, remove or change portions of the trust as you want.
The opposite is true for an irrevocable trust. Less flexible in that regard, the irrevocable trust involves relinquishing control of your assets. Amendments require much more work, like getting approval of the beneficiaries of the trust to sign off on changes. This drawback plays directly into the benefit of the trust, as assets that aren’t directly under your control may not see an impact from estate taxes or the probate process.
Special needs trust
You can utilize both forms of trusts in planning for loved ones that need special considerations. The primary focus is on maintaining eligibility for assistance programs that have very strict asset requirements. You can still offer lifetime money management while maintaining benefits from government programs, and make sure funds are available in case assistance from other avenues ever ceases.
Setting up the right trust depends heavily on the circumstances. Make sure your loved ones are taken care of after you pass, whatever their needs may be.