When is it appropriate to create an SNT? The person with disabilities or his/her representative must consider an SNT when the person with disabilities encounters one of the following 3 situations:
1. Receipt of a personal injury or medical malpractice settlement
2. Receipt of inheritance
3. Preserve existing assets at the on-set of disability
1. To maximize public and private resources available to individuals with disabilities
2. To extend the shelf-life of existing assets in order to provide for supplemental needs/benefits
3. Because there are many variables/dynamics that cannot be planned for or anticipated:
a) The needs of the person with disabilities
b) Uncertainty of what government benefits will provide
c) Advancements in technology
4. A guardian has a duty to engage in estate planning
2. Third-Party Settled Trusts
Family (other than the disabled person's spouse), friends and others may choose to fund a third-party special needs trust for the disabled person, either by transferring their own cash or other assets or providing for the transfer via a will or life insurance policy. Third party special needs trusts do not jeopardize means-tested goverment benefits, such as Medicaid, and are not subject to Medicaid payback requirements.
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