If you’re setting up a special needs trust, you might have some questions. One thing that many of our clients wonder is whether or not the trust can be revocable, if it can have its rules changed. A Des Moines trust lawyer can answer that and any other queries that you have.
Get Help TodayA special needs trust is irrevocable. This means that its terms cannot be changed once you set it up. So you do lose control over the trust and its assets. However, this also means that the assets of this trust have some protection. If someone comes after you with a lawsuit or a bill from a creditor, an irrevocable trust cannot be targeted. Creditors and would-be plaintiffs would have to come after other assets of yours.
You want this to be an irrevocable trust because that better protects the assets inside. You set up this trust for a particular reason, and it is unlikely that you’ll have to change that. So for the most part, being revocable would just open up the beneficiary of the trust to getting taken advantage of.
There is really only one downside to this. You cannot predict what will happen to the beneficiary of this trust in the future. If their needs change, the trust cannot be adjusted to accommodate that. So you should think about the potential of your loved one’s condition to get worse and think about adding more assets to a trust if that’s a possibility.
It can seem like a bad idea to lose control over a portion of your assets by forming an irrevocable trust, but there are still many good reasons to establish a special needs trust. First of all, it’s one of the best ways to provide for a loved one with special needs.
You can address their living expenses, but a special needs trust can also be used to fund other things. If your loved one has a hobby or if they want to travel, your assets can be used to help them with that. There’s no reason why someone with special needs cannot live a full life with the help of what you leave behind for them.
Another reason to choose this kind of irrevocable trust is that the assets in it are not counted as if they belong to your loved one. This means that if they qualify for government benefits, like Medicaid, this trust will not affect their eligibility.
If you want to learn more about special needs trusts and other ways that you can use your assets to care for others once you have passed away, contact our law firm. An attorney from Herting Law, PLLC is ready to help you with all of your estate planning needs.
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