From our “Ask a Question” Mailbag: I am planning to set up a Special Needs Trust for my son and place a gift in the trust each year to help provide care for my son after my death. If he dies without the entire amount being used, whom can I name as the beneficiary?

Most Recently Updated July 31, 2018.

Special Needs Trust Remainder

Special Needs Trust Remainder

If I have the facts correct, you are thinking about forming an Irrevocable Trust for your son during your lifetime (“inter vivos”) and then placing money into the trust every year to create a pool of funds to provide care for your son after your death. I also assume, in order to provide the maximum tax benefits, you will use Crummey Powers to make these transfers free of Federal Estate Tax, and you will not serve as trustee.

If your plan is to keep these assets out of your taxable estate and to have them be sheltered from your future creditors, at your son’s death you should not name yourself, your estate or the creditors of your estate as beneficiary of the remainder. Instead, you are free to name anyone else or a charity. To maximize the tax benefits, you could have the remainder pour into a new trust for the successor beneficiaries. This would shelter the remainder from the successor beneficiary’s creditors, spouses and lawsuits.

More Planning Questions?

The special needs trust is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Special Needs Trust Remainder

I hope that this article was helpful in explaining a Special Needs Trust. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

Tags: Irrevocable Trust, Pennsylvania, Philadelphia, Special Needs, Special Needs Child, Special Needs Estate Planning, Special Needs Planning Attorney, Special Needs Planning Lawyer, Special Needs Trust