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Month: February 2011

When It Comes To A Supplemental Needs Trust, Out of Sight Should Never Be Out of Mind

You’ve been a responsible planner for your family’s future, especially your child with special needs.

You’ve met with an attorney, set up a Supplemental or Special Needs Trust and you can breathe a sigh of relief. Your work is done, right?

Wrong.

Funding and forgetting about a Trust can be as detrimental as not forming one at all. And having one that isn’t properly written can render it completely useless.

Supplemental Needs Trusts (sometimes called Special Needs Trusts) allow people with mental or physical disabilities, or even people with chronic or acquired illnesses, to have unlimited assets held in Trust for their benefit. If you have a child, grandchild, or even a spouse with a disability, a Supplemental Needs Trust can ensure that they have the funds they need to maintain their lifestyle after you’re gone.

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Should you name your kids as Co-Trustees

Naming your kids as co-trustees means that they must act together. If down the road they can’t agree or cooperate in making decisions then there is a deadlock. Absent some way of resolving a deadlock in the trust agreement, eventually this trust will end up in a court dispute between the two co-trustees. Examples of a dispute are where one child want to sell real estate and the other doesn’t. This often occurs where one of the children is still residing in the property.

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Does your Estate Plan need to be redone? –The Straight Scoop on the New Tax Law

This law impacts you in several ways. First, we need to first make sure that your property will be divided according to your desires, and not dictated by Congress or by state law. For more than 50 years it has been common to use a written mathematical formula to divide the assets of a married couple when the first spouse dies to maximize estate tax savings. Likewise formulas have been used to provide funds for charitable causes and to benefit family and friends. With such increased exemptions impacting “formula clauses” in wills and revocable trusts, it is probably in your best interest to review your estate plan to be certain the plan will work as you intend.

Frankly, most estate plans should be reviewed every few years to make sure that the plan is not only consistent with the state of current law, but to also make sure that it reflects the family’s needs and circumstances. The new tax law provides a perfect reason for you to sit down and review your goals and make sure the important pieces of your plan still fit.

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