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Important considerations with a special needs trust in Texas

One of the most common concerns for Texans when they think about the future and with drafting estate planning documents is if they have a loved one who will need to be cared for after they are gone. Statistics show than there are more than 40 million people across the nation who had a disability in 2016.

Since some of these disabled people are not capable of caring for themselves, parents and other guardians should take steps to protect their loved ones. Toward that end, a special needs trust should be considered. There are certain factors to consider with these issues.

For those estate planning to care for a person who is disabled, finances are imperative. Steps to take largely depend on the person’s needs and care level required. For example, many people with disabilities are eligible to get help from the government through Social Security Disability Insurance or Supplemental Security Income. This can be backed up by an estate plan structured in such a way, so the beneficiary will have everything her or she needs from the government and the trust.

When significant assets are part of the estate, a special needs trust can protect the disabled person’s inherited assets, and they can retain the benefits they are getting from the government. There are first-party and third-party trusts.

Using a first-party trust will give any benefits that are left over after the beneficiary dies to states that gave them benefits. Third-party trusts will give that money to family members after the beneficiary has died. Another option is an ABLE Account. This allows the saving of up to $100,000, while keeping government benefits. There is a payback provision with ABLE accounts, just as there is with a first-party trust.

For some disabled people, a guardian is needed to make the decisions, and a trustee would handle the special needs trust. Other disabled people can part in the decisions. This should be weighed as a special needs trust is formulated.

When thinking about the future and trusts, knowing the different types of trusts available is vital, especially when there is a disabled person who must be cared. A lawyer who understands trusts can help with deciding how best to craft the document to make certain the loved one is cared for and maximizes the benefits and quality of life.

Source:, “Preparing for a life after death: A guide for parents of adult children with special needs,” Tamara E. Holmes, Jan. 22, 2018