Trusts are common legal arrangements that, in their simplest forms, allow money or property to be set aside for the welfare of a person. While trusts are most commonly associated with wealthy people transferring assets to their children, trusts can serve a variety of purposes that have little or nothing to do with transferring inherited wealth. One of the most useful trusts for people living in Georgia is the "special needs trust."
Special needs trusts are used to manage assets for people with various kinds of disabilities, including developmental disabilities, disabilities caused by a serious accident or elderly persons with disabilities caused by aging. A special needs trust can be set up to hold money awarded in a personal injury lawsuit or money set aside by parents for a disabled child. A trust has three parties: the settlor who establishes the trust, the beneficiary who will receive payments from the trust and the trustee, who will manage the trust assets. The trustee also disburses trust assets in accordance with the requirements of the trust document. Most special needs trusts use professional trustees, such as the trust department of a bank.
A special needs trust can be a crucial feature of special needs planning for disabled individuals. For example, special needs trusts can also simplify the problem of coordinating the transfer of assets to a disabled person with the availability of federal disability benefits. Most such federal programs have a financial eligibility test that disqualifies or reduces benefits for persons whose income is too high. If such income or other assets are placed in a special needs trust, they will not be considered in calculating an applicant's income or net worth.
Anyone who is interested in a special needs trust may wish to get more information about setting up such trusts.