Special needs trusts and age restrictions

Whether you struggle with a disability and want to protect your eligibility for government assistance that you depend on or you want to create a special needs trust on behalf of your disabled loved one, it is pivotal to understand how this estate planning option works. Aside from reviewing the advantages of a special needs trust and the beneficiary’s unique circumstances, it is vital to go over age limitations.

In fact, if the beneficiary is approaching 65, it is extremely important to understand that this age is the cutoff point with respect to establishing and funding a special needs trust.

Setting up a special needs trust

According to Delaware Regulations, special needs trusts contain the assets of disabled people under the age of 65. Disabled people can set up trusts for their own benefit, and other parties can also establish a special needs trust on behalf of a disabled person, such as parents, grandparents, legal guardians and the court.

People must create a special needs trust before the disabled beneficiary’s 65th birthday.

Funding a special needs trust

After a beneficiary turns 65, their special needs trust remains in place until it becomes terminated, so long as the creation of the trust occurred when they were 64 or younger. However, additional assets cannot go into the trust once a beneficiary turns 65. Assets added following a beneficiary’s 65th birthday are subject to penalties and not exempted.

A special needs trust could help you safeguard Medicaid eligibility, but it is very important to keep these age limitations in mind and set up a trust before it is too late.



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