Important Considerations When Setting Up A Trust For A Disabled Sibling In South Carolina

In this article, you can discover…

• If you can set up a special needs trust for an adult sibling.
• The types of special needs trusts available in South Carolina.
• What assets can be placed into special needs trusts.

Can I Set Up A Special Needs Trust For My Adult Sibling?

Yes, you can establish a special needs trust for an adult sibling. Special needs trusts can be created for any individual with a disability, regardless of their age.

What Types Of Special Needs Trusts Are Available In South Carolina?

There are generally three types of special needs trusts in South Carolina.

The first is a first-party special needs trust, which is funded with money belonging to the disabled person, often from a settlement or award resulting from an accident.

The second type is a third-party special needs trust, where a family member or another individual creates and funds the trust on behalf of the disabled person.

The third type is a pooled special needs trust, which combines funds from multiple disabled individuals and is managed by a nonprofit organization. This pooling allows for better investment opportunities while keeping each person’s funds separate for their individual needs.

What Assets Can Be Placed In The Trust?

There are no specific restrictions on the types of assets that can be placed in a special needs trust. Cash or cash equivalents are the most common assets used, but other types of property and investments can also be included.

Can Other Relatives Contribute To The Trust?

Yes, anyone can contribute to a special needs trust. This includes friends, relatives, acquaintances, or any individuals who wish to provide support for the beneficiary.

What Legal Mistakes Should Be Avoided When Setting Up A Special Needs Trust For A Disabled Sibling?

When setting up a special needs trust for a disabled sibling, it is crucial to include language that prevents the funds from being used for expenses that Medicare or Medicaid would cover. The trust should also clearly restrict how the beneficiary can access and use the money.

Additionally, in the case of a first party special needs trust, the trust must include provisions that require repayment to Medicaid from any remaining funds after the beneficiary’s passing. Avoiding these key legal mistakes is essential to ensure the trust functions properly and protects government benefits.

How Can I Ensure My Sibling’s Quality Of Life Is Preserved After My Passing?

To help ensure your sibling’s quality of life is preserved after your passing, the best thing you can do is to establish a special needs trust specifically tailored to their unique needs. The trust will provide financial support for them while also protecting their eligibility for government benefits.

Additionally, it is advisable to create a trust for yourself and your family, naming the special needs trust as a beneficiary to provide funds for your disabled sibling’s care.

Still Have Questions? Ready To Get Started?

For more information on special needs trusts in South Carolina, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.