Hi, good morning everyone. My name is Megone Trewick. Thank you for joining me this morning for our first fireside chat or first Bryan Fagan fireside chat. I’m so excited. I’m on pins and needles. This topic today is going to be on special needs trust. However, you can come right back here every fourth Wednesday at 10 30 and we will have these events every time for you at this event and all the future events, you can bring your live questions, you can post them right in the chat and in the comments section, and I will answer them live. Please, please, please, please don’t put your private information in there. Ask your questions very broadly so that I can give you an answer. However, if you want to ensure that you get the specific answer for your specific issue, by all means you can click on the link we have there.
You can schedule your free complimentary consultation with one of our ambassadors and we will gladly, gladly get those questions answered for you. So as I said, it’s going to be every fourth Wednesday 10:30 AM, log in, bring your questions, any legal topic, not any topic, any legal topic, and I’ll gladly answer those questions for you. But this morning I want to focus on special needs trust. You may know the law office of Bryan Fagan because you have come to us and we are known in the community to be the premier family law firm. However, you may also know that the law office of Brian Fagan also does estate planning, wills, probate and guardianships. And my name is Megone Trewick. I’m the director and the leader attorney for estate planning wills and probate. And so I’m here with you this morning and if I’m not here every fourth Wednesday with you, it’s going to be another stellar attorney from our firm.
Okay, so let’s jump in it this morning. This morning we’re going to talk about special needs trust. Why am I so excited about a trust? Well, as you know, I have three children. My children are near and dear to my heart. In fact, every day I get up, I get up for them and I celebrate them in everything I do and I try to live in an excellent manner because I know that they’re watching. Not only that, I know that just like me, your children are also important to you. So a special needs trust are for those children that we may have or a loved one in our family that need additional help. So for special needs trust, your loved one has to have a diagnosed disability, okay? So you have a person who may have down syndrome or who may have severe autistic maybe on the severe side of the autistic spectrum and you’re looking at them and you know that they will need additional help moving forward into adulthood.
What a special needs trust helps you do is it helps you to give them that added level of care above and beyond what their governmental benefits may give them without disqualifying them for service. Okay, so we’re going to talk about special needs trusting. So what exactly is a special needs trust? A special needs trust is a trust created by you, the loved one, the parent, the grandma, uncle. It doesn’t matter who or by that special needs individual. Looking forward, maybe you are developing dementia. Maybe you see in your future that you’re going to need help you as the trust or can create that trust that special needs trust is saying, I’m going to need help in the future and therefore I’m placing all my assets within this trust. Therefore, when I may need Medicaid and so forth, when they’re looking back, they’re not going to be counting those assets that I am putting in the trust for me.
So I say that I may gone know that I’m at the beginning side science of dementia, then I’m going to create this trust. I’m going to put my assets in this trust which is a irrevocable trust and I’m going to set up someone that I trust and know will take care of me and take care of my assets as my trustee moving forward. So all my assets are in this trust and therefore I know that I will qualify for Medicaid when I need it in the future. And I also know that these assets that I’ve placed in the trust will be managed for my benefit. However, the typical person that creates a special needs trust is usually a parent or grandma or grandfather, something like this. They create a special needs trust for the benefit of that individual that has that disability. So this trust, the grantor is usually a third party.
Your the loved one, the mom, the dad, whatever, and the beneficiary is your special needs child and the trust or the person managing the trust can be you. Many people are of the disbelief that, oh, if I create a special needs trust, I must have an institution to manage it for me. No such thing. And if someone says that to you, you know that they probably aren’t sure what a special needs trust is, but you as a parent, you can create the trust, you can manage the trust for the benefit of your child. You can’t use the assets of the trust to sur plant or to cover something that the government benefits would provide, but you can use it to supplement those government benefits. You can pay for that piano, piano class. You can instead of your child having to go on the bus, you may buy a car and pay a driver.
You can fix up the house for them. You can do all these things with a special needs trust property that gives them a augmented, nicer quality of life than what their government benefits will qualify them for. Okay? So the special needs trust is an irrevocable trust. So once you create it, once you fund it, those assets need to be used for the benefit of that special needs child. You cannot change your mind. You cannot pull it out and sell it and buy a beach house in Boca. You can’t do that. The property in a special needs trust is that irrevocable trust and it must be managed for the benefit of the child. Okay? So that’s what a special needs trust is. So why create a special needs trust? You create a special needs trust because you want to guarantee that your loved one will have a high quality of life when you’re not around.
Unlike a trust that can live for much longer period of time, several generations down the road. Unfortunately all of us have a expiration date and therefore if we have special needs children, we have to be thinking, how can I make sure that my special needs child is taken care of when I’m gone? As you may know, a lot of these children will far outlive you and so you cannot be thinking, oh, I’m going to be there in the long haul for my child. You have to say, just in case I’m not there, I want to make sure that my child is well taken care of. So we’re not going to leave anything to chance. We’re going to make sure that we take care of our children. Okay, so why create one? You create one to supplement those government benefits that they may get. And two, you create one so that if you pass away, you don’t give your special needs child a windfall of assets which will disqualify them for their government benefits.
You don’t want to do that if they’re on Medicaid, if they’re, they’re on ssi, if they’re on whatever, you do not want to give them all the property because guess what? That’s going to be accountable asset to them. And if it’s accountable asset to them, you just disqualify them for their means tested support, you would be putting them at a great disservice. So you create the special needs trust so that you can leave property to them. In fact, you can create the Sally May Special Needs trust and then you can provide that trust to the grandparent who may want to leave little Johnny $10,000. You can provide it to the father that you separated with. Maybe you went through a divorce and now you have two household. You have the father over there. He wants support his child even though the child is an adult, he wants to leave the child in inheritance.
You can create that special needs trust, provide that information to that loved one, and he or she can leave property in the name of the trust which will be managed for the benefit of your special needs child. A special needs trust is there so that you can do for your child even when you’re not around. Okay? So you create the special needs trust, you can make yourself the initial trustee, you can manage your trust until you can’t and then you can designate within that trust document who will take over after you. You can choose a younger brother, you can choose an institution, you can choose a sister, all the powers in your hands so that you can choose who you want to take care of your loved ones. And what’s great is that person that you designate can also pay it forward and also designate someone if he or she can’t do it anymore.
Even the third party, a financial institution and another attorney or whatever can manage the special needs trust for your child. So who can make a special needs trust? We talked about this before. You as a parent can make it, a loved one can make it, I can make one for whoever. It can be a third party and then that special needs individual can also create a trust if they have the capacity to understand what the trust is so that they can do it. Okay, so you have the individual, they see that they’re going to need a trust in the future and so they say, okay, I’m going to create my trust pro. I’m going to create a trust and I’m going to put my property into the trust. This is called a self-funded trust. So the self-funded trust, he puts his property in there lay, he’s going to designate someone he trusts to manage a trust for him and then when he progresses in his disability, maybe he becomes incompetent even there he can go ahead and have, apply for benefits, have the government benefits, and then use the assets in the special needs trust to supplement his lifestyle.
And you can’t get better than that. You get best of both worlds. Okay? So how can you create a special needs trust? I would not recommend and I would never recommend that if you are not an attorney or even if you’re an attorney, if you don’t know what a special needs trust is, I would not recommend that you go online and google whats a special needs trust and then slap your assets in that unless a special needs trust is especially formulated for you. Unless it has a specific language, you may be leading yourself into future trouble that you did not even calculate. Do not do that. Contact a qualified estate planning attorney who can create a special needs trust for you. Fortunately for you, the law office of Bryan Fagan has attorneys that can create your special needs trust that can make sure that the language in there speaks specifically to your special need loved one, and so that if they need government benefits, they will not be disqualified.
All right, so this comes there. This is a time though where you get to ask questions. I know it’s crazy. You can ask live questions to me now and I’ll answer them. We have been advertising this fireside chat on our website for a while and so some of you have submitted some questions before time and I have them on my paper ready to go, but by all means, if you want to be bold, in fact you don’t even have to be bold because I won’t see your face. Just go ahead type your question in and we can answer them for you. All right? One of the questions that I got is I have a special needs child and I’m going through divorce. The special needs child is 16 years old. So you are looking at a situation wherein the other parent has two years or so where they may not be obligated to pay child support.
You may have a situation where the parent wants to pay child support going forward, but in this case, this is a 16 year old special needs child and so you’re looking, okay, when this child turns 18, even though our children are always children, this child is not going to be a child under the law. This child will now be an adult and therefore you’re, you’re divorcing, you have your special needs kid that’s 16. What you want to do is to create your special needs trust then and there while you’re going through the divorce. What that does is all the child support that you are going to get, that that other spouse will be paying in all the support that you even want to pay the child. You have the special needs trust then and there. Then you can ask for the child support to be paid into the special needs trust in lieu of child support.
So you have your now 18 year old special needs child and they apply for government benefits because the child support is not coming to them. That’s the key. It is not accountable asset and therefore you can continue supplementing that child’s lifestyle without disqualifying them for benefits. You have the special needs trust and you are going to name it in the divorce decree. What that does, it also obligates the other parent to continue to pay those payments into the trust even after the child has passed 18 years old. It is a beautiful way to ensure that your child is taken care of. In fact, you can negotiate this in mediation. If you have a child, you’re going to, mediation is going to be mandatory. If you come to that mediation with the trust already created and you’re negotiating the child support and you’re negotiating child support past 18, you can then and there in that media settlement agreement, ask for those payments to be paid into the special needs trust.
You are the trustee, you are the trust store. You’re the one creating it. You’re the one managing it for the benefit of that child win-win situation. Win-win situation. I know a divorce, I’m, I’m smiling, but I know a divorce is a taxing situation. I know nobody wants to go through a divorce willingly. However, if you have to go through a divorce, go through the divorce with the tools and in the proper way to make sure that you get the best and maximize outcome. So the Law Office of Bryan Fagan is a one stop shop. You can get your divorce there. You can reach over to my department. The Estate Planning Department will create that special needs trust for you, hand the documents over to your divorce attorney. You go to your mediation and you’re already winning. It’s a beautiful situation. I have one more question. I have a special needs child and I want to leave them property.
We already talked about what that will do. If you leave property for your special needs child in a will. I’m not saying to disinherit your special needs child by no means no. We want to make sure we prepare and we provide for them, but how we do so must be different than we provide than how we’re providing for or other children that do that are not special needs. We cannot provide for them in the same way. So if you have a special needs child, say that you have two children or you have one child, you do, please do not just leave them the property in your will. They’re going to pass away. The executor is going to come up, collect all your assets and distribute the assets to your special needs child. All those assets are now accountable assets and you will disqualify them from getting their benefits.
I’m sure that’s not what you want to do. So what you want to do is to create a special needs trust. Many people will be like, oh Megone I can’t afford a special needs trust now… you cannot afford not to have a special needs trust. Ideally you want to create the special needs trust along with the will. Then you want to name that special needs child as the beneficiary of the special needs trust. Then in your will, you want to leave the assets that you’re leaving that child with special needs. You want to leave those assets to the trust.
I can’t. I’m excited. Special needs trust. You can’t probably read it from me. I think it’s one of the greatest tools that we have created so that we can take care of our children because at the end of the day, that’s why we work. That’s why we’re out there nine to five. That’s why we’re burning the midnight oil because we want to give them a better quality of life than we had. And if you have a special needs child, you want to make sure that you always give them the best, always give them what you can. And so you have you create that special needs trust and then you leave it in the will. In fact, guess what? You can even leave life insurance to the special needs trust. So you want to create life insurance. You buy the life insurance, you make the special needs trust the beneficiary of the life insurance.
When you pass away, the special needs trust will be funded with that life insurance. So you may not have property now to put in the special needs trust. In fact, that’s why people say, hang on, I don’t have anything. I don’t have anything. And then I talk to them. I say, I say, do you have any life insurance? Oh yes, I have 200,000 life insurance. I have a hundred thousand dollars of life insurance. And then you have a special needs child that you named the beneficiary. No, no my friend, you want to call me. Let’s do your special needs trust. Change the beneficiary, make the life insurance, make the beneficiary the special needs trust. And even though you have nothing in the trust right now, when you pass away, the life insurance will fund the trust. You select who the trustee will be that will manage these assets for your child with special needs.
It’s a beautiful situation and therefore some of you can create it before you pass away. And the great thing is that you can actually name it as the beneficiary, but for some of us, we may not have the funds to create the special needs trust while we’re alive. You can create your will and within the will tell your executor to create that special needs trust and then the executor creates a special needs trust and then you instruct the executor. Anything that I leave for little john must be placed in the special needs trust and be managed for him or be managed for little Suzy. So right then in there you’re getting the full benefit while you’re alive. If you decide to create a special needs trust, but at least even if you don’t have the funds, you can create it at your passing and then the trust gets created and funded by the executor.
But you want to make sure that your assets are there to create that trust because you don’t want to ask the executor to do something that they can’t. I have one question that came in. What is the difference between an able and special needs trust? So you have able accounts, able accounts, not an able trust. You have a able account that this special needs person, the person with special needs can have, you can place money in that special needs trust, that special, that able account, you can place money in that able account for that special needs child. The money in that account is not counted, is not accountable asset as long as you keep it within a certain threshold. And so that’s special needs child. They can get their credit card, they can feel very independent, they can go shopping with their card, they can do whatever with the money on their card and it gives them some amount of autonomy over their lives and it helps them. It can help them with life management skills. They can know how to pay their phone bills with their own card able accounts are very beautiful. I really like them and I think they can be very instrumental in helping your child with special needs become an independent adult or as independent as can be.
So you can use the ABLE account along with the special needs trust and they go hand in hand. You have the special needs trust that the special child with special needs does not have any control over, but you can give them an able account and then they can do little things by themselves with that able account and so they can feel confident in doing things and then they don’t necessarily have to always be asking that trustee for what they need and the trustee can allow them to just do a little bit by themselves. And so it helps to foster independence and it helps to foster real confidence in that special needs child. All right, so we are at 10:57. So I have three minutes and I’m going to one once more tell you if you want to talk more about this, if you want to schedule an appointment, there is our link in the content section.
Click on the link, schedule your appointments with me, schedule your appointment with the ambassadors. We can help you. You get on here, we create that special needs trust for you. But remember what I said. These fireside chats are not just for the topic we’re going to talk about that day. You can bring your own questions, bring your own questions to the Facebook Live event. Ask them, it can be on a divorce. In fact, when you come to some of the situations, some of the chats next to the fireplace, it’s not lit today, but when you come to the chats, if I’m looking at the comments section and you’re asking lots of family law questions, I’m going to pull up another chair and we’re going to have our family law attorney here a answering your questions. Sometimes I will give a presentation on a family law topic before start taking the questions.
So if you want to talk to an attorney for free, this is a wonderful venue. And so every fourth Wednesday we’re going to come, we’re going to talk about a special topic and then the questions can be fielded and we’ll answer them then and there. It’s one way that the law office of Bryan Fagan wants to reach out to you so that you can know that we are there for you. We’re all, we’re committed to you and we’re committed to the success of your family. My name again is Megone Trewick. I’m the lead estate planning attorney here at the Law Office of Bryan Fagan. Please reach out to us for your probate estate planning guardianship questions. And of course, as always, we’re here for all your family law needs. Thank you.
Bryan Fagan, a native of Atascocita, Texas, is a dedicated family law attorney inspired by John Grisham’s “The Pelican Brief.” He is the first lawyer in his family, which includes two adopted brothers. Bryan’s commitment to family is personal and professional; he cared for his grandmother with Alzheimer’s while completing his degree and attended the South Texas College of Law at night.
Married with three children, Bryan’s personal experiences enrich his understanding of family dynamics, which is central to his legal practice. He specializes in family law, offering innovative and efficient legal services. A certified member of the College of the State Bar of Texas, Bryan is part of an elite group of legal professionals committed to ongoing education and high-level expertise.
His legal practice covers divorce, custody disputes, property disputes, adoption, paternity, and mediation. Bryan is also experienced in drafting marital property agreements. He leads a team dedicated to complex family law cases and protecting families from false CPS allegations.
Based in Houston, Bryan is active in the Houston Family Law Sector of the Houston Bar Association and various family law groups in Texas. His deep understanding of family values and his professional dedication make him a compassionate advocate for families navigating Texas family law.
