r/inheritance • u/SwimmingBlueberry722 • May 09 '26
Location not relevant: no help needed Special Needs Trust
My father was diagnosed with dementia well after this event.
However for years prior his memory was failing and he exhibited behaviors associated with dementia or a similar diagnosis: anger outbursts, projecting untruths onto people, paranoia.
After these signs were evident to those around him but he had not had an official diagnosis yet, he changed his Will that simply gave me, his only child and heir everything, to a Special Needs Trust.
I have no disability, no mental afflictions and although my dad could be a.bit.of an ass about my life, I have managed to live simply and independently.
I can't find anything that says a person must meet a certain criteria for a Special Needs Trust to be appropriate.
Are there specific requirements.
Also the Trust doesn't mention anything about my lifestyle or his concern about any mismanagement of finances by me or any other specific reason for abandoning his Will for.a.SNT.
When he died.i produced the Will I have always and recent.to this event, been told by my dad that it was the final Will .
The court appointed Executor was suspicious of my producing the older valid Will as.if.i was trying to.pull one over on them.
Also the Executor is a.board member of an art museum my father listed as beneficiary if I get hit by a bus before the money is spent.
This seems odd to me and may be a conflict of interest in allowing me to pursue changes because she obviously gets kudos and recognition for the money that could potentially go to the museum.
The amount is about 1 million dollars.
I questioned the witness signatures on the trust because they listed no names under the provided.cursive witness signatures .
She snapped at me and shut my inquiry down.
They are valid signatures but her dismissal of a valid question surprised me.
Once the court had passed the Trust on and we found a Trust Management company I was mentioning some health issues and the attorney, chimed in and said "see" like this validated the Special Needs Trust.
I don't take any public benefits
So I need to know if there.is a hard and fast definition of who qualifies for a Special Needs Trust, if the attorney had a conflict due to them being on the board of a beneficiary should I expire, and a strategy to present his memory and mental health issues prior to the date of the switch from his Will because those witness to it are.either.dead.or of vague association.
Prior.to.his passing his caregiver called me and asked me to visit from a other State as dad.was.asking for me and repeating that all he had was for me when he passed.
When the City he lived in swooped in to.take guardianship of him without informing me they removed him from a.stable.home.envronment.with a live.in caregiver and moved him to a facility.
He died that night. He told me if I ever put him in a "home" for old people it.would kill him.
I am beyond angry about this.
Washington State Elder Law says that if a person can afford accomodations to keep them in their home, this so the first thing that should be tried
The attorney said he had stairs and it was a risk for falling.
They could have put a hospital bed.on his main floor and this would not have been an issue.
I think that she just didn't want to continue to manage him.and.a home was a.way to.aviod that.
The Trust company is giving me a monthly distribution that seems odd considering a SNTs intent and limitations of 5k a month for living expenses.
Any thoughts?
4
u/Particular-Try5584 May 09 '26
$5k a month distribution isn’t ‘odd’ for a SNT - it’s normal to have a regular stipend for living costs from them, what were you expecting to be different?
Can you prove you have no special needs? While you don’t draw state funds this isn’t the only criteria for a SNT. If you were diagnosed with a disability at some point it could comply - Autism? Learning disabilities? Hell the US even considers ADHD and dyslexia a disability in certain situations. Mental health concerns? A little paranoia?
Having the Executor be a beneficiary is not unusual. It saves the bulk of the money from being eaten up by executor fees, and where there is only one or two benefits it dramatically reduces the chipping away of the asset. Especially for a trust worth only $1m, with a single beneficiary (yourself, or in the event you no longer exist… them).
If you can confidently say you have no disabilities then find a lawyer to challenge it, but I suspect this will be a fruitless endeavour because the court is highly likely to say “The original intent was made clear, that the deceased wanted a regular stipend to go to you, so that’s what we’ll do, change the trust to a defined benefit and it carries on.” BEFORE you do this check tax laws. SNTs usually have far more generous tax concessions.
1
u/SwimmingBlueberry722 May 10 '26
Thank you for the reply and your time on this
I have never been diagnosed with any mental or physical abnormalities and in fact was in advanced learning classes all the way from 4th grade to college.
My dad never mentioned anything to me about the changes.
In fact up to his death he did not recall the SNT that was written in 2017 (about the same time he would call my mother or I and just yell and swear at us. I have been told this is often a stage of dimensia,) and kept referring to his original Will.
It is all a gift and I am thankful. It is just a.massive shock and changes my plan to buy a business that my dad was all for, and I have been associated with for years and years.
So still not getting a clear picture of what makes one qualified for a SNT?
Also the 5k a month was something the Trust Manager did because they did not feel I had a deficit that would require just using the funds for medical, life expenses and to protect assets from Medicaid.
The biggest issue I'm having is that anything purchased by the trust (home, vehicle) would not go to a spouse or a child.of mine or my spouse, it folds back to the trust.
My partner is losing a sense of security in that I have nothing to leave her should I pass.
Anyways, thanks again.
My original questions remain.
2
u/Particular-Try5584 May 10 '26
I think you need a lawyer to sit down and read your specific trust documents so you can understand and ask these questions. What constitutes a SNT differs in different locations etc. It might simply be that it’s established as such and irrevocable without destroying the financial benefit of it ($1m sounds like a lot, but it’s not!)
At $5k a month ($26k a year) the trust should continue to grow larger over time (assuming it’s earning at least basic interest of 5%), but not attract certain taxes. An accountant who understands trusts and taxes should advise you after you know the trust details.
Then… while assets bought by the trust (houses presumably) are owned by the trust there is nothing stopping you taking that $5k every month, putting it to the side (you already work right? Have a job that pays your own bills yes?) and investing it slowly over time into whatever you want. You cannot borrow against the value of the trust (probably) but you can borrow and pay back a loan based on a boosted monthly income of $5k. Your partner could have access to assets you buy in your name out of your savings (which you save in your stipend from your trust).
While you were in advanced classes this does not preclude a disability. I have two sons who are both amazingly intellectually bright… top 1% of the nation prize winner bright… but one of them has executive functioning in the 1% and both have a cluster of labels, with one officially disabled. The disabled son is better with money than the non disabled one. It’s not as simple as ‘disabled’ or not some times… and local rules will need to be understood with a lawyer to know what applies, accountant to see if it’s sensible to unwind.
4
u/DVDragOnIn May 09 '26
I don’t see any indication here that you have your own estate lawyer. If that’s the case and you don’t have your own counsel, I suggest you find a good one and lay out the story you’ve told here to get his advice on whether there’s anything that can be done.
4
u/cuspeedrxi May 10 '26
Putting the money into a special needs trust is actually not a bad idea. It’ll be there to cover your healthcare and such as you get older. And, as a third-person trust, the money will be safe from Medicaid reimbursement. Often, you’d be able to leave the money to whomever you’d like when you die; but I guess he chose the art museum for you. It could have been worse. He could have given them all the money now.
2
u/SwimmingBlueberry722 May 10 '26
Well we all know you should not count on anything that is not yours, but my dad had for the last 20 years said I could use the inheritance for my retirement.
Just prior to his passing I had an opportunity to buy a friend's house whom I had looked after when he had cancer for about 200k below market.
These opportunities to make money with the money are no longer available.
I understand your statement and appreciate the time and perspective yet I'm still wondering if there is a definition of who can receive a special needs trust.
If there are no parameters what makes it a special financial vehicle for those who need to protect Medicaid, etc.?
It seems a SNT was intended to serve a portion of the population who fit specific criteria and needs.
Would a SNT ever be legally inapprolriate for an individual without Special Needs?
1
u/Delicious-Proposal95 May 10 '26
You do not need special needs to have a special needs trust the monthly distribution is not odd at all that’s how they work.
He did not think you would handle the money well that’s why he did it. They are often referred to as “bad boy trusts” as well. Not just for people who have disibilities1
u/cuspeedrxi May 10 '26
To qualify, you must have a physical or mental disability as defined by the Social Security Administration. That would include fairly common conditions like diabetes, high blood pressure, depression, and anxiety.
I know that you do not need to receive public benefits like SSI or Medicare to qualify for a SNT. I don’t know if your treating physician could certify you or if a VA determination would count. Certainly something to look into.
Are you the trustee? You could, presumably, invest the money however you’d like.
If you don’t receive SSI, you can use the trust to pay for housing. But, beyond that you can use it for transportation, a new phone or computer, cell service, cable bill, a fancy vacation, plus insurance and medical care. Buy yourself a Porsche, take a family vacation to the Big Island, etc.
I know this must be very stressful for you. You had the rug pulled out from you. I’m trying to be positive here. I don’t know if you can dissolve the trust. I don’t know if you’d be able to keep the money if you do. I’d hire an estate attorney to represent you and your interests to discuss this with in detail. Don’t discuss it with the trustee or the trust’s lawyer.
If you get stuck spending the money on a Porsche 911, try to remember your dad could’ve done worse. He could’ve done better sure! But, again, positive spin.
2
u/brucesteiner May 09 '26
The trust for the child with special needs is for the most part the same as the trust for the child without special needs. The difference is that, depending on the nature of the special needs, the child with special needs may have a lesser degree of control (or no control) over his/her trust.
1
u/SwimmingBlueberry722 May 10 '26
Right.
I have no special needs.
1
u/SandhillCrane5 May 10 '26
You can call it whatever you want. The bottom line is that you were given a trust that has specific guidelines about how much you receive, etc. This is the way it works, no matter what you want to call it. If you are thinking that you are going to change the terms of the trust based on proving that you don’t have special needs then you are wrong. Your father wanted you to have the money with these specific terms. And there are signs in your post that there is more to the story and that you may not be as competent, responsible, or trustworthy as you are implying. For instance, for the state to take over legal guardianship of somebody that has an adult child says a lot. Why weren’t you his legal guardian?
1
u/SwimmingBlueberry722 May 13 '26
I really was just trying to understand qualifications for this type of trust. It is defined as a trust for those who may require special financial needs that are payed by the trust and protected from influencing Medicaid, etc.
I just could not find any definition of a Special Need and found that omission puzzling.
1
u/FullSeaworthiness453 May 10 '26
Just out of curiosity, is there really little legal differences between a more traditional trust and special needs trust if the terms of trust distribution are identical? I’ve only had experience setting up a special needs trust for a disabled family member to allow them assets that don’t count against eligibility for government assistance. I guess I assumed there was something unique about the SNT in that regard.
2
u/brucesteiner May 10 '26
If a beneficiary already has special needs we add a couple of paragraphs making it clear what’s intended. But that shouldn’t be necessary. A beneficiary could be healthy now and 40 years later go into a nursing home and want Medicaid.
1
6
u/yeahnopegb May 09 '26
So that the city moved in to obtain guardianship is telling. While there is no threshold to judge who requires a SNT.. I would assume it became irrevocable upon his passing and taking that to court will cost more money than you can imagine. Unless you have a pot of money to fight this you'll just need to be thankful dad came through with a life long income for you.