Special Needs Trusts
A special needs trust is created to ensure that beneficiaries who are disabled or mentally ill, or anyone receiving government benefits, can enjoy the use of property which is intended to be held for their benefit. In addition to personal planning reasons for such a trust (the person may lack the mental capacity to handle their financial affairs) there may be fiscal advantages to the use of a trust. Such trusts may also avoid beneficiaries losing access to essential government benefits.
A trust for a disabled beneficiary may have particular advantages in relation to the provision of healthcare, long-term care and nursing home benefits under Medicaid.
Special Needs Trusts are frequently used to receive an inheritance or personal injury settlement proceeds on behalf of a disabled person or are founded from the proceeds of compensation for criminal injuries, litigation or insurance settlements.
A common feature of trusts is that they may be run either by family members (a private trust) or by trustees appointed by the court. Especially where a trust is to be established for a disabled child or young person, great care is generally taken in the choice of appropriate trustees to manage the trust assets and to deal with future replacement appointments.