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Podcast: Establishing a Special Needs Trust: Tips to Get Started

Share current LOB: WealthManagement

Host: When first learning about how to establish a Special Needs Trust, parents can get overwhelmed. Caring for a child with special needs is an emotional circumstance, and dealing with the financial ramifications can make the situation more stressful, unless you break down a special needs trust into its core components.

 

Bill Frazier, Senior Vice President with SunTrust Bank, recommends focusing on the purpose of establishing the trust. This can help ensure it's an effective solution for your family, not an overwhelming endeavor.

 

Frazier: A special needs trust is simply a way to ensure that money is available now and in the future for the long-term care of an individual with special needs. The individual is being responsible for maintaining their eligibility for public benefits, such as Medicaid and supplemental security income. Using a special needs trust is simply a vehicle that keeps those assets from being an available resource when applying for the benefit program.

 

Host: After defining a special needs trust, parents need to surround themselves with key advisers to help establish it.

 

Frazier: The first thing you want to do is really start assembling the team of people that are going to work on this planning process for you and starting off with a life care planner so that they can help answer the question, "How much is it going to cost to care for my child when I pass away?" because that seemingly is the hottest point in the planning process.

 

Talk to a professional fiduciary, such as a corporate trustee, an attorney, or someone else in the professional fiduciary field to understand special needs trust, and in their conversations, they can help you better understand the different types of trusts.

 

You'll also want to speak with a financial planner or an adviser so they can help assess those long-term care cost figures that you receive from the life care planner, and based on your personal earnings capability, help you better understand if you're able to meet those goals.

 

And in the event that you're not able to meet those goals, it's certainly important to speak with an insurance specialist because they would be better able to help you understand what insurance options exist, which is really a very popular solution to the situation when you're not able to meet those savings capabilities, the insurance will help close that gap. And finally, identifying the attorney that specializes in elder care and special needs law that can help pull everything together for you. That would be the team that I would start off with.

 

Host: Once the team is in place, parents can follow specific steps to implement the trust.

 

Frazier: Choosing the right kind of trust is really going to be critical. Because there are so many different types of special needs trusts, sitting down with somebody to help best determine what the trust situation for your particular circumstances are would make things a little bit more understandable.

 

Identifying a trustee after you have identified which type of trust to use, I think is certainly going to be a very important step. A lot of cases, family members, when they're going through this process, will want to choose somebody that they know personally, that they feel can handle the personal care decisions related to taking care of their individual or their family member with special needs, but you can have co-trustees, so I think it's very worthy of consideration to have a professional be in the mix when you're determining who the trustee is.

 

The fourth thing that you'd want to do in this scenario is—and your attorney would certainly guide you through this process—but having your current legal documents, if you've got any in place, getting them updated so that they can reflect the new planning and take all of these new discussions into consideration.

 

And finally, don't ever neglect your own finances. That's something that we see very often with parents is that they put so much emphasis and time on caring for their child with a disability that they start to lose sight of their own personal financial situation, and understandably so, but it's very important to make sure that you're tending to your personal finances.

 

Host: For more information, contact your SunTrust advisor or visit us online at SunTrust.com/wealth.

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Bill Frazier, Senior Vice President with SunTrust Bank, discusses steps parents can take to implement a Special Needs Trust, helping them deal with an emotional life circumstance

Caring for a child with special needs is an emotional circumstance. And dealing with the financial ramifications is a challenge, so it’s critical to break down a Special Needs Trust into its core components, says Bill Frazier, Senior Vice President with SunTrust Bank. Frazier outlines steps you can take as a parent to implement a Special Needs Trust.

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

SunTrust Private Wealth Management is a marketing name used by SunTrust Banks, Inc. and the following affiliates: Banking and trust products and services are provided by SunTrust Bank. Securities, insurance (including annuities and certain life insurance products) and other investment products and services are offered by SunTrust Investment Services, Inc., a SEC registered broker/dealer and a member of the FINRA and SIPC. Other insurance products and services are offered by SunTrust Insurance Services, Inc., a licensed insurance agency. Investment advisory products registered with the SEC.

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