Create A Special Needs Trust For A Special Child
It was a matter of time
It was a matter of time. At birth, the fetus did not get enough oxygen in her brain. Eli was born perfectly normal physically, but with serious learning and motor impediments. When she turned three, it was obvious that she was a special chi. Eli was put under psychiatric treatment and prescribed some heavy medications to control her severe hyperactivity, attention deficit and erratic behavior
The medications were effective - partially taking care of some of her symptoms - but their side effects were devastating. Eli lost her eyelashes, eyebrows and the rest of her body hair. And even when she was able to socialize up to a certain degree, Eli would never be able to advance much in academics or hold a job, get married or raise a family. It was understood that Eli was a "special child". She lived in a special world. Eli would always need close assistance and medical care. Also, several of her medications were very expensive.
Knowing this, Tom, Eli's father, a successful entrepreneur, became deeply concerned about Eli's future. He was especially concerned about Eli's welfare in times when he wouldn't be around to provide for her. Who would pay for Eli's home care and medical needs once he'd leave this existence? He decided to consult his attorney.
The attorney suggested creating a trust on behalf of Eli. He would draft a legal document establishing an agreement between three persons to take care of all of Eli's future financial needs. This it how he explained it to Tom:
Tom would the "trustor", the owner and founder of the trust. Tom would deposit an initial amount of money in a trust bank account. That account would be in the name and managed by an administrator. Legally this person is called the "Trustee". The trustee would be in charge of issuing all monthly payments related to Eli's medical and home care. The trustee would also keep record and prepare reports of all financial transactions related to the trust fund. Eli's financial needs included shelter, food, clothing, medications, entertainment and someone to watch her. The trustee would make sure these service providers would get regularly paid to avoid any interruption of the services. Eli of course, would be the "beneficiary", the person on whose benefit the trust was formed. Tom would be able to transfer money to the trust bank account as needed. This is called a "special needs trust". This is one type of "inter vivos" trust, meaning that it works during the trustor's lifetime.
Eli's dad would have to create a "testamentary" kind of trust as well, the attorney suggested. This type of trust is only effective when one passes away. This trust would be created in Tom's Last Will. Some of Tom's estate property would be destined to fund Eli's trust fund.
Eli's mom, Theresa, was enormously pleased when Tom got home from consulting his attorney and told her the news. The couple could now stop worrying and dedicate their lives to nurture and enjoy Eli's company, instead. Once away, they both would be able to rest in peace knowing that Eli would be provided for with everything she would ever need, even in their absence.
There are several other considerations to take into account when forming a Trust. You might want to designate a family member as trustee or hire an accountant. In the latter case, you would provide how much this person would be paid for his or her services. You can take many differet steps when creating a trust and there are trusts for every need out there. Forming a trust like Eli's is one of the greatest advantages for passing property on because it is exempt from estate taxes. Also, the property transferred to a testamentary trust does not go into probate court, becoming accessible to the beneficiary regardless of every other consideration. Trusts are an excellent option for saving money and securing someone else from having a less fortunate future.
This article intends only to demonstrate one of the many ways a trust can take care of one family's concern. To create a trust, you may want to seek professional assistance.
by: Evane Abbassi
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