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William Schantz – Setting a Special Needs Trust (SNT) Before Retiring

Special Needs Trust (SNT)

Many people delay their retirement due to personal financial conditions. William Schantz surmises that many parents and caretakers of children with special needs also worry about the future of special needs children after they retire.

As a parent or caretaker, you understand the medical, financial, and emotional needs of special needs children and want to ensure their long-term welfare.

William Schantz suggests setting up a Special Needs Trust before retiring to ensure your children remain financially secure and eligible for benefits after they die.

Special Needs Trust (SNT) Explained by William Schantz

A grantor, usually a parent or caretaker, sets up an SNT to transfer funds that will support the beneficiary in the future or present.

Children with special needs require long-term financial support, and the grantor can specify a trustee or third party to oversee the trust spending.

Since special needs children may be unable to handle the paperwork and legal formalities, William Schantz emphasizes that the trustee should always act in the child’s best interests.

Parents can become trustees themselves or assign the role to a close relative. Parents that are both grantor and trustee need to name a successor trustee.

Parents need to know that their children may lose governmental benefits if assets are directly passed to them. William Schantz recommends parents create a special needs trust as part of their revocable trust.

Steps to Establishing a Special Needs Trust (SNT) by William Schantz

William Schantz suggests creating a sustainable and long-term solution for your children. To do so, identify your child’s long-term needs and the purpose of SNT.

You can start by making a few important decisions:

  • The amount of money you want to transfer to the SNT based on the cost of living and care your child needs.
  • The duration for which the SNT will provide financial support to your child.
  • Stipulate the time and circumstances under which the funds will be distributed.
  • Whether your child or a third party will control the trust fund spending.
  • Where the funds in SNT will be routed in case your child dies.

After determining the goal of the SNT, guardians should seek professional legal assistance to set up the trust. The SNT is a legally binding agreement, and drafting an iron-clad SNT ensures that your child is protected.

You can complement the agreement with a letter of intent that trustees and welfare organizations can use to provide better care to your child.

The next step is to select your child’s trustee. The trustee will decide and oversee the trust distribution while adhering to tax laws and other legal obligations. The parent can become the trustee or assign the role to a relative or a trusted organization.

The final step is to establish the SNT. There are different types of special needs trusts, including third-party special needs trusts, first-party special needs trusts, and pooled trusts.

William Schantz’s Recommendation

A first-party trust is established with the beneficiary’s assets and is mostly used to care for those who become disabled due to injury later in life.

Pooled trusts are a good option for grantors with unreliable trustees since not-for-profit organizations manage such trusts.

William Schantz recommends retirees set up a third-party trust fund since it can be funded through their life insurance policy or gifts from relatives.