Creating a Special Needs Trust in Illinois

When you love someone with special needs, you want to make sure that they will be taken care of—for life. Examining your options as far as setting up a trust is the correct first step towards guaranteeing long-term security for someone with special needs. At Life’s Plan Inc., we’ve helped hundreds of clients set up special needs trusts in Illinois for themselves or a loved one.

What is a Pooled Special Needs Trust?

A trust of any kind includes at least three parties: the donor, the trustee, and the beneficiary. The donor provides the funds that will make up the trust. These funds are administered by a trustee, who is responsible for dispersing the funds in accordance with the donor’s wishes. The beneficiary of a trust is the person who receives these funds. In some cases, the beneficiary is also the person who provided the funds.

How Special Needs Trusts are Different

Creating a trust is a common feature of estate planning at large, but special needs trusts serve a particular purpose. In setting up a special needs trust, you can control how and when funds will be provided to a disabled or elderly beneficiary. A special needs trust can ensure that someone’s assets will not prevent them from accessing the important government benefits that they need, such as Supplemental Security Income (SSI) and/or Medicaid.

Explaining ‘Pooled’ Trusts

A pooled trust, which comprise the focus of our work at Life’s Plan Inc., allows individual beneficiaries to pool their resources together for investment purposes. Though funding is pooled in this way, individual beneficiaries retain separate accounts for disbursement according to the predetermined trust agreement.

Life’s Plan Inc. can help you form one of two pooled special needs trusts in Illinois: third-party supplemental trusts and self-funded payback trusts. The main difference between these two forms of special needs trusts is where the money is coming from.

Third-Party Supplemental Trusts

Money which belongs to anyone other than the person with a disability should be placed in a Pooled Third Party Funded Trust. This would include money that parents, grandparents, aunts, uncles, siblings, spouses and children want to give to the individual. It is too late to use this option once a person has died with a will that provides for money to be given to a specific person (or without a will where the state laws provide for that person to inherit). Personal injury settlements cannot be placed in this type of trust either.

Self-Funded Payback Trusts

Money that belongs to an individual should be placed in a Pooled Self-Funded Payback Trust. This would include an inheritance (which specifically is left to the individual, or which comes by way of the laws of intestacy to an individual), a personal injury settlement, a Social Security back payment, stocks and bonds received as gifts, and savings.

Case Management

At Life’s Plan Inc., we recognize that no two individuals are exactly alike and tailor our services accordingly. Our customized case management services help ensure that every participant’s needs are met throughout the trust creation and administration process. Some examples of continuing support have included assisting participants in the acquisition of property, handling invoicing, planning vacations, or following up with phone calls after a doctor’s visit.

Begin Your Special Needs Trust in Illinois Today

Remember that the first and most essential distinction to be made in deciding what kind of trust to create is where the money is coming from. Once you have determined which type of Trust fits your situation and needs you should begin to work with an attorney to establish the appropriate trust.