Using a Special Needs Trust Form
Is it okay to use a form to make a special needs trust without a lawyer?
If you’re looking for a form to make a special needs trust, you probably won’t find many options. This is because – no surprise – lawyers write the vast majority of most special needs trusts. This article discusses why that is and under what circumstances you might safely make a special needs trust yourself.
What a Special Needs Trust Does
First thing’s first. What is a special needs trust (SNT), and how does it work? The main goal of most special needs trust is to improve the quality of life for a person with special needs, without jeopardizing eligibility for government benefits. If a person with special needs owns too much property outright, they risk losing government benefits. SNT’s allow people with special needs to benefit from an inheritance, gift, lawsuit or divorce settlement, or other sum of money without owning it themselves. SNT’s also provide a trustee who keeps trust funds safe and who carefully spends trust money on the person with special needs – this can be an important benefit for those beneficiaries who cannot manage money on their own.
You can learn much more about Special Needs Trusts on Nolo.com.
Why Lawyers Write Most Special Needs Trusts
Lawyers write most SNTs because in many cases the language of the trust must be technical and precise. In order to keep trust funds from becoming the beneficiary’s own property, the trust document must include specific language required by federal and state regulations. First-party SNTs (funded with the beneficiary’s money) are particularly complicated – and for this reason, it’s almost always better for an experienced lawyer to draw up a first-party SNT. Third-party SNT’s (funded by someone other than the beneficiary) can be more simple, and people without lawyers can make them successfully. See below for details about how. Learn more about First-Party vs. Third-Party Trusts.
In either case, special needs trusts provide the opportunity to leave very individualized instructions about the beneficiary and his or her needs, as well as instructions for how trust funds can be used. An experienced lawyer will have the skills to include such details and instructions, without jeopardizing the integrity of the trust. An SNT form, while providing the nuts and bolts of a trust, will not be tailored to your family’s situation.
That said, in some situations, making a special needs trust without a lawyer is a reasonable choice.
When You Can Safely Use a Special Needs Trust Form
Here are the main criteria for safely using a special needs trust form:
- You want to make a third-party trust. A third-party SNT is funded with money or property from someone other than the person with special needs. Very often, a parent or grand-parent funds a third-party special needs trust with what would otherwise be the beneficiary’s inheritance.
- You’re willing to spend time and effort. If you make an SNT yourself, you must do it right. So you must be willing to find and use a good product that explains to you exactly how to make the trust. And then you must carefully follow those instructions.
- Hiring a lawyer is not an option. In all cases, a knowledgeable and experienced lawyer will be able to make a trust best-suited for your family. So if you have the means, it makes sense to seek a lawyer’s help. But if hiring a lawyer is not an option for your family – or if trust funds will be too small to justify hiring a lawyer -- and if you meet the other two criteria above, using a form to create a special needs trust without the help of a lawyer is usually better than not having a special needs trust at all.
If you’re ready to make your own special needs trust or just want to learn more about how they work, read Special Needs Trusts, by Stephen Elias and Kevin Urbatsch. This book shows you how to leave any amount of money to your disabled loved one -- without jeopardizing government benefits. It provides plain-English information and forms that let you create a special needs trust by modifying your will or living trust document.
If you can’t afford to have a lawyer make an individualized trust for you, another option is to join a pooled trust. Pooled trusts are organizations that pool families’ resources to provide for loved ones with special needs.
Read more about Pooled Special Needs Trusts.
Working With a Lawyer
If you do decide to hire a lawyer to make your trust, make sure the attorney has experience with making special needs trusts. Not every lawyer, or even every estate planning lawyer, has this kind of specialized experience.
To search for a knowledgeable lawyer near you, try starting with Nolo’s Lawyer Directory.