A special needs financial planning course combines self-study materials with an interactive learning experience taught by experts in the field. It covers issues related to minors and adults, special trusts, ABLE Accounts, SSI, and more. The system is ideal for professionals interested in obtaining a special needs financial planning certificate.
Types of special needs trusts
Whether your child is disabled or has other special needs, it is essential to ensure their assets pass to a person who will take care of them. If these assets pass to an individual without trust, this can interfere with government benefits. The good news is that there are two types of special needs trusts that can be managed by nonprofit organizations or family members that offer special needs financial planning.
Special needs trusts are set up to provide additional resources for a disabled person or family. They can supplement public benefits or provide other financial security. The use of these trusts is that they aren’t considered a detriment to a person’s eligibility for government aid.
A qualified special needs planner can help you choose a suitable trust for your child or loved one.
Problems with testamentary trusts
A testamentary trust is a type of estate planning tool that puts money into a trust for your loved one. These funds cannot be accessed directly by the beneficiary and are supervised by a trustee. These funds are not taxable and do not affect the beneficiary’s government benefits.
The trustees of each discretionary trust may periodically choose which of the named beneficiaries (if any) may benefit from the distributions for any given period. Testamentary trusts are discretionary trusts created in Wills. The inclusion of testamentary trusts in wills has many benefits.
But before you set up a special needs trust, you should understand how they are taxed in every state. You also need to consult an accountant to ensure your trust is tax-efficient.
Setting up an SNT can be costly. The trustee may require annual fees, and minimum amounts are required to set up the trust. A financial planner with special needs planning experience can help determine its cost. Beneficiaries must request funds from the trustee, which may reduce their independence.
Problems with pooled trusts
Pooled trusts are state-approved financial planning tools for special needs beneficiaries. They can help families with special needs access means-tested and need-based benefits. They have no age restrictions and professional trustee oversight.
In some states, pooled trusts can lead to uncompensated transfers. In Virginia, for example, funding a pooled special needs trust after age 65 will be treated as an uncompensated transfer. Fortunately, not all states have the same rules about special needs trusts. In Minnesota, the state Supreme Court recently ruled that transfers made by disabled individuals over 65 are not subject to penalties.
One problem with pooled trusts in special needs planning is that co-trustees may not always agree on how the funds should be used. They may have different views about the best way to manage the funds, so it’s essential to make it straightforward who will manage the funds.