Q: Special Needs Trusts
I know a provision in the Will can request an SNT for the benefit of a disabled child. Are SNTs created and/or funded after the death of the grantor(s)? It’s my understanding that one should not leave assets directly to a disabled child, so they don’t lose their government benefits. If a trust isn’t created and/or funded, how does one specifically leave assets for a disabled child? More specifically, all assets in question already have designated beneficiaries and would bypass probate. The assets would be distributed to the other children since the disabled child is not named, but there wouldn’t be anything left to fund the SNT.
a Special Needs Trust can be created either in a Will, in which case it is not funded until the death of the Grantor, or can be created during the lifetime of the Grantor, in which case it is usually funded (at least partially) when created, and additional funds can be added during the lifetime of the Grantor and/or at the death of the Grantor.
However, you are also correct that the Trust can be rendered useless if assets that have beneficiary designations are not correctly designated since the assets will never be funded into the Trust if the beneficiaries do not include the Trust
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