Do You Need a Special Needs Trust?

Some beneficiaries are not able to manage a large inheritance by themselves. Serious mental illness, intellectual disabilities, addiction to substances or gambling, and other issues can prevent a beneficiary from productively managing his/her inheritance.

When considering this issue I think of special needs beneficiaries as falling into two basic camps: 1) those who, even as adults, will likely need to be taken care of and, 2)  those who need to be safeguarded from the self-harm that can come from their own poor judgment or destructive behavior. While there is certainly overlap, the first group is composed of beneficiaries who have medically diagnosed, severe disabilities that interfere with their ability to fend for themselves by holding a job or accurately evaluating the intent of others. Some trust creators fear heirs in this group could be easily taken advantage of by others and/or will have a very difficult time living independently.

The second group of beneficiaries, those whose poor judgment or behavior may bring self-harm, might also have a medical diagnosis but it’s more likely to be related to addiction, bipolar disorder, or a personality disorder. These beneficiaries may be quite capable of holding a job and see themselves as perfectly able to manage a large inheritance, but the trust creator’s knowledge of their life story would suggest otherwise. The unrestricted availability of a large inheritance could actually amplify a beneficiary’s counterproductive and destructive behavior bringing harm to them and those they love.

Do you wonder if one of your beneficiaries may not be able manage a large inheritance? Do you wonder if the sudden availability of a large amount of money could do more harm than good, by possibly aggravating an existing problem for a beneficiary?

As a neutral and disinterested third party, I can help you explore these questions and discuss your options for gathering objective evidence to aid in reaching a decision. If you decide that self-management is not a viable choice, we can discuss alternatives and referrals that will help you put a comprehensive plan in place.