| A Special Needs Trust question…read on:
READER QUESTION:
In a recent LISTEN TO LAWRENCE LETTER, you talked about a revocable Special Needs Trust. I always thought that all Special Needs Trusts are irrevocable. Are they not?
MY RESPONSE:
Just remember that trusts can be very flexible, and we can often shape them into a plan that works best for the situation. It is true that most Special Needs Trusts are set up as irrevocable. However, while you are alive, you do have the option to set up a revocable Special Needs Trust for your child. Even though your child is the beneficiary, you can retain the ability to revoke or amend the trust whenever you want. Some clients relish this flexibility. It allows you to set aside money for your child while keeping control. It allows you to appoint a trustee, but then watch them as they learn their new role as trustee. Some people find this plan works well for them, while others don’t care or the facts and circumstances of their case make it unwise.
On the other hand, setting up a Special Needs Trust during your lifetime may not be necessary at all. YOU ARE THE SPECIAL NEEDS TRUST. You can use your money to help your child at any time without affecting your child’s benefits (if you do it right). In such cases, the Special Needs Trust may not be needed until after your death…in which case it will always be irrevocable.😊 |
