Tag: Special Needs Trusts

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Why are Trusts so Useful?

Credit: AZ Statewide Paralegal

The process of arranging a trust is something that is often not even considered until someone drafts a will with a qualified elder law attorney. In spite of that, they are a crucial aspect of estate planning. The development and execution of trusts is the backbone of planning one one’s financial future, or that of their family’s. Upon death and/or illness, where will one’s assets go? That’s part of what trusts help determine.

Credit: Rocket Lawyer

There tends to be some confusion about the difference between a will and trust. In simple terms, a will spells out how one wants their affairs distributed/taken care of after they die. A trust, on the other hand, is a  fiduciary arrangement that gives a trustee the right to hold and manage assets for the benefit of a specific purpose or person. Trusts may be utilized during the life or death of the creator, depending how it is arranged, and can often be created in conjunction with a will.

Trusts are key to avoiding probate. On paper, probate doesn’t seem that time consuming, as it is the process in which a person’s assets and property are distributed post-death or illness. When one is involved in probate, however, they realize how many problems it can cause. One of the main issues people have with probate is that it requires mandatory court involvement, which can be time consuming and expensive. These fees come directly out of the estate, which means less money for the beneficiaries.

Credit: Ross Law Firm

Trusts skip the probate process. They allow for the smooth transition and private handling of all distribution and can even eliminate the need for court involvement entirely. There are a number of trusts that can be arranged based on the needs of the grantor– from revocable trusts to special needs trusts. Age, health, and financial situations are key indicators as to what type of trust one might require. The best way to determine what one needs is through the assistance of a wills & trusts layer.

While one will still likely need an executor for the trust, that trustee’s compensation is taken directly out of the trust and is far less expensive than the court fees that would follow probate.

Credit: Assisted Living Center

Trusts are one of the many aspects of estate planning that should not be left in the hands of an average person. In order to assure you (or a loved one) has their financial future properly secured, receives all the benefits they are entitled to, and sets things up well for their family in the event of their death, you should always work with an elder law attorney. Elder law attorneys have the skillset you require to ensure your estate plan is properly tailored to your life and needs so you can rest with ease.

How are Trustees of Special Needs Trusts Compensated?

Credit: Commonwealth Community Trust

Serving as a trustee to a special needs trust (really, to any kind of trust) is a difficult undertaking. The trustee must administer the trust so all involved parties receive everything they are entitled to. A misstep on that front can result in legal liability on the trustee’s part.

With such a difficult job before them, it’s clear trustees should be compensated– but how does that happen? Does it come straight out of the beneficiary’s pocket, or is the trustee compensated some other way?

Credit: Eldercounsel Blog

To help clear this up, West Palm Beach elder law firm, Shalloway & Shalloway, has outlined the process of trustee compensation on their latest post. With special needs trusts being one of the firm’s areas of practice, firm president Mark Shalloway is able to clearly and concisely describe the different types of trust management and how they are compensated.

  • Institutional Trustees: Trust companies and financial institutions have the experience and resources to keep track of a beneficiary’s money, how to follow trust documents, and how to follow the law. These companies usually charge a percentage or flat fee, depending on the size of the trust.
  • Private/Individual Trustees: Private/individual trustees bring a personal touch to trust management. The best options for this type of trustee are lawyers are accountants, as they understand finances and the law. These professionals usually charge an hourly fee that can change based on the size of the trust.
Credit: Legacy Enhancement Trust

Thankfully, both of these trustee options do not rely on out-of-pocket payments from the family. Compensation for these trustees comes out of the trust itself. This takes one concern off the beneficiary and their family’s shoulders.

Work with a knowledgeable, experienced elder law attorney to ensure that your loved one has properly planned for their future. This will help maximize their chances for qualifying their Medicaid, Social Security, or other needs-based governmental programs, allowing them to live out their life in comfort.

Don’t wait until crisis— work with the experienced, dedicated staff at Shalloway & Shalloway today. Call (561) 686-6200, fill out this contact form, or visit their offices.

1400 Centrepark Blvd., Suite #600, West Palm Beach, FL 33401