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Special Needs Trusts Under Texas Law: Protecting Disability Funds

Special Needs Trusts Under Texas Law: Protecting Disability Funds

Navigating the world of estate planning can be complex, especially when it comes to providing for the future of a loved one with special needs. In Texas, as in many other states, creating a Special Needs Trust (SNT) can be a crucial component of securing their financial well-being while preserving their eligibility for government benefits.

As an experienced estate attorney in the Lone Star State, I’ve witnessed the profound impact that proper planning can have on individuals with disabilities and their families. In this comprehensive guide, we will explore the ins and outs of Special Needs Trusts under Texas law, shedding light on how they work, why they matter, and how they can help protect disability funds.

Understanding the Basics of Special Needs Trusts

What Is a Special Needs Trust?

A Special Needs Trust, also known as a Supplemental Needs Trust, is a legal tool designed to manage assets for the benefit of an individual with special needs. These trusts are established to enhance the quality of life for a person with disabilities while safeguarding their eligibility for government benefits, such as Medicaid and Supplemental Security Income (SSI).

Why Are They Necessary?

Individuals with disabilities often rely on government assistance programs to cover essential expenses like medical care, housing, and food. These programs typically have strict income and asset limits. Without proper planning, receiving an inheritance, lawsuit settlement, or other windfall could jeopardize their eligibility for these crucial benefits.

Key Elements of Special Needs Trusts in Texas

1. Choosing the Right Trustee

Selecting the right trustee is paramount when establishing an SNT. This individual or entity will manage the trust and make distributions on behalf of the beneficiary. It’s crucial to choose someone who understands the unique needs and goals of the person with disabilities.

2. Funding the Trust

Assets can be transferred into the trust from various sources, including family contributions, legal settlements, or life insurance policies. It’s essential to follow legal guidelines to ensure the trust’s validity.

3. Trust Provisions and Flexibility

SNTs are highly customizable. They can provide for a wide range of needs, such as medical expenses, housing, transportation, and even quality-of-life enhancements like entertainment or hobbies.

4. Protecting Eligibility for Government Benefits

One of the primary purposes of an SNT is to preserve a person’s eligibility for government assistance. When structured correctly, the assets held in the trust are not counted when determining eligibility for programs like Medicaid or SSI.

The Benefits of Special Needs Trusts

1. Financial Security

An SNT offers peace of mind, ensuring that funds are available to provide for a loved one’s long-term needs, even after the caregiver or parents are no longer able to assist.

2. Quality of Life

These trusts can be tailored to enhance the beneficiary’s quality of life. This might include funding for education, vacations, or specialized therapies.

3. Government Benefit Preservation

By sheltering assets within the trust, individuals with disabilities can continue to receive essential government benefits without interruption.

4. Legal Compliance

Properly drafted SNTs adhere to state and federal laws, ensuring that they serve their intended purpose effectively.

Seeking Legal Guidance

Creating a Special Needs Trust is a significant decision that requires careful consideration of the unique needs and circumstances of the individual with disabilities. If you’re exploring this option, it’s essential to consult with an experienced estate attorney who specializes in Texas law.

At SilverLeaf Legal, we have a deep understanding of estate planning, including the intricacies of Special Needs Trusts in Texas. We’re here to help you navigate the process, ensuring that your loved one with special needs enjoys financial security, an enhanced quality of life, and continued access to vital government benefits.

If you have questions or need assistance with Special Needs Trusts or any other estate planning matters, don’t hesitate to reach out. Your family’s future deserves careful planning and protection.

Portrait of Thomas D. Fortenberry with a description of his background and credentials. Thomas graduated from The University of Texas at Austin School of Law with Honors in 2005 and has a background in electrical engineering, business management, and mathematics. He is an active member of the Texas State Bar, including the Real Estate, Probate, and Trust Law section, and is registered to practice before the United States Patent and Trademark Office.
Thomas Fortenberry

Thomas graduated from The University of Texas at Austin School of Law with Honors in 2005. Thomas has a background in electrical engineering, business management, and mathematics. Thomas is an active member of the Texas State Bar including the Real Estate, Probate, and Trust Law section. Thomas is also registered to practice before the United States Patent and Trademark Office.