5 Things You Need to Know About Special Needs Trusts in Texas

Typical trusts are fairly simple to understand. They involve three parties: a trustor, trustee, and beneficiary. The trustor owns the assets and sets up the trust. They delegate managing the trust's assets to the trustee, who manages them in the beneficiary's interest.



Ordinary trusts are a popular estate planning tool, as they're great at managing complex family dynamics and many assets. However, there are certain things common trusts can't do, such as care for special needs children. A typical trust will work as mentioned above for a special needs child, but it may force the child to forgo public assistance, such as Medicaid.

Due to the unique requirements of special needs children, there are different trusts available for them. These are called special (or supplemental) needs trusts (SNTs), and they don't compromise the child's access to public assistance. Here's what you need to know about special needs trusts in Texas.

Benefit Limits

To retain access to government benefits, a person needs to own less than $2,000 worth of assets. An SNT limits the rights of the beneficiary so that their eligibility for public assistance is preserved.

Government Reimbursement

After your child passes, the government has a claim over the funds left in the trust. Said funds essentially compensate the government for the assistance they give your child over their lifetime. The remaining funds are disbursed to successor beneficiaries. However, there's rarely anything left in the fund after the state is compensated.



Ordinary Trust vs. Special Needs Trust

An SNT's trustee will expend the trust's funds to supplement the special needs beneficiary's public assistance and preserve their access to it. An ordinary trust's disbursements will count towards the $2,000 limit.

Trustees and Beneficiaries

Generally, a beneficiary can't exercise any control over an SNT. The beneficiary doesn't have control over the assets, nor can they manage them. Additionally, they can't demand funds from the SNT. Lastly, the child can't be the fund's trustee. The fund is only used to supplement government assistance.

Spending

The trustee can spend the funds to improve the child's quality of life. For instance, they can spend on entertainment, electronics, therapy, vacations, etc. Additionally, they can also spend the funds to fill gaps in government assistance programs.

If you're attempting to set up an SNT, get in touch with us at Mike Massey Law. We provide trust, probate, and estate planning attorneys in Travis, Harris County, Houston, and Austin.

6 views0 comments

Mike Massey JD, MBA, MPA just might be the 195th most interesting person in Texas. He has 4 college degrees and he's working on a 5th:  BBS Accounting; MPA Master's in Professional Accounting; JD Law Degree; MBA Master's in Business Administration; BBS in Biblical Studies (in progress).

Read More

FOLLOW US

  • Yelp Social Icon
  • LinkedIn Social Icon
  • Facebook Social Icon

Locations:

Austin Westlake: 418 Grace Ln, Austin, TX 78746

Houston: 10810 Katy Fwy, #102,  Houston, TX 77043

San Antonio: by appointment only

Austin Arboretum: In process of relocating

¡Se habla español!

Subscribe to our newsletter

© 2020 Mike Massey Law.  Managing Attorney Mike Massey, 8911 Capital of Texas Hwy, Ste 3210, Austin, TX, 78759.  Email: mike@MyTxWills.com.  Phone: 888-407-2407.  Mike Massey, Texas Bar # 24032584. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. Privacy Statement.  Prices can vary based on your unique situation and potential add-on services.  Prices for in-office (in person) meetings typically cost more than virtual meetings that are done over the phone instead of in person.  Prices for virtual estate planning do not include an execution ceremony or notary, as those services are not available with our discounted virtual estate planning packages. If your a personal injury case client on a contingency fee, then if we do not win, you will not be responsible for attorney's fees, court costs, or litigation expenses, but if we do win money for you via a settlement or court verdict, then attorney's fees, court costs, litigation expenses and unpaid medical bills will be taken from your share of the recovery. Mike Massey Law is not responsible for your unpaid medical bills.

FAQ's, Q&A, Answers, Information on this site: The materials presented on this site are intended for informational purposes only. These materials should not be used as legal advice applicable to the reader's specific situation. In addition, our provision of this information to the reader in no way constitutes an attorney-client relationship. No action should be taken on information provided within this website without counsel from a professional attorney. The request or receipt of any information from this website or any of the attorneys in our employ does not signify our acceptance to represent the recipient of this information.  It is our intention that all materials posted on this site be up to date and correct. However this information is subject to change without notice and should not be relied upon for accuracy and pertinence to the reader's specific circumstances.

*Note on Contingency Fees: No attorney’s fees unless you recover. Court costs, litigation expenses, and medical bills are paid from your share of the recovery. If there is no recovery, you will not be responsible for any court costs or litigation expenses, except for unpaid medical bills.