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The Ultimate Estate Planning Duo: Guardianships and Special Needs Trusts

Guardianships and Special Needs Trusts (SNTs) work together in the world of Estate Planning to provide positive welfare and financial security for individuals who require ongoing care with special needs. This article aims to explore the intersection of these two legal mechanisms, as well as specific skill sets required for each role. July 31, 2024

Guardianships

A Guardianship is a legal relationship where a court appoints an individual to make decisions for someone who is unable to do so independently. This commonly involves decisions within medical care, living arrangements, personal welfare, and more. Individuals under Guardianship may have personal assets which require oversight to ensure their well-being.

Special Needs Trust (SNT)

Individuals with disabilities can qualify to receive government benefits such as Medicaid or Supplemental Security Income (SSI). Eligibility for these programs can be jeopardized if personal assets exceed a certain threshold. A Special Needs Trust helps to protect eligibility status, while also providing a way to manage funds for the health and well-being of the individual.

Roles Within Each

The roles of a Guardian and a Special Needs Trustee differ in their responsibilities and skill sets. Guardians should possess strong traits such as empathy, understanding and the ability to make informed personal decisions on behalf of the individual. While financial decisions for personal funds may be involved, extensive financial expertise is typically not required, given the often-modest value of assets.

Similarly, a Special Needs Trustee should care about the well-being of the beneficiary, but also demonstrate a commitment to managing trust assets. The appointed Trustee handles assets specifically designated for the beneficiary’s care within the trust. This role demands thorough knowledge to ensure compliance with government benefit regulations. Responsibilities include (but are not limited to) annual accountings, tax reporting, and adherence to eligibility guidelines.

Conclusion

While Guardianships and Special Needs Trusts serve distinct purposes, they share an overarching goal of ensuring care and financial stability. By understanding these roles and appointing individuals with an appropriate skill set, anyone can prepare for the future welfare of someone who requires special care and planning.