Welcome to the Kazi Law Firm! We are a boutique law firm steeped in Texas tradition personifying the warmth and congeniality consistent with southern hospitality. We believe in preserving integrity and professionalism with true Texan charm, staying true to our roots, while providing essential, affordable legal services to all. Headquartered just north of Dallas, Texas in the rapidly growing suburb of Frisco; with offices in The Woodlands and Cedar Park; the Kazi Law Firm concentrates on contract drafting and review, wills & estate planning, trusts & asset protection plans, and general business law needs.
We are often contacted by parents of children with special needs who want to ensure that their children are continued to be taken care of even after they have passed. Estate planning is essential for all parents, but is even more critical for families with disabilities.
Parents of children with special needs face unique challenges when it comes to estate planning. When a child turns 18, he or she will likely rely on public assistance as a primary means of support. Yet this situation creates a problem when parents want to continue to financially support their child in meaningful ways. Benefits such as Supplemental Security Income (SSI) and Medicaid have income and asset limits. If a child with special needs is given property outright, it may disqualify him or her from much-needed benefits from the state of Texas. Maintaining a child’s eligibility for public assistance, while still ensuring that he or she enjoys a high quality of life, requires a properly drafted special needs trust.
A special needs trust (SNT) is a supplemental care trust (also called a discretionary special needs trust) that offers parents and loved ones the ability to provide for adult children with special needs, without jeopardizing their public benefits. A trust is a vehicle for owning and managing property for the benefit of a specific individual or group (the beneficiaries). In the case of a special needs trust, the property is held and managed for the benefit of a loved one with disabilities. Put simply, because your loved one won’t actually own the property in the trust, it won’t disqualify him or her from public benefits. Caveat: This type of trust must be truly supplemental in nature. It may only provide for support and expenses beyond basic needs. The goal of the trust is ultimately to enhance your loved one’s quality of life.
Types of Special Needs Trusts
For a special needs trust to function as it should, it must comply with rigorous requirements. These requirements differ depending on the type of trust.
First Party Trust:
These trusts are funded with the beneficiaries’ own resources – typically an inheritance, a legal settlement, or insurance proceeds. However, a parent, loved one or other third party must establish the trust. First-party trusts must also contain a “payback” provision. Any funds remaining after your child’s lifetime must be returned to the state as reimbursement for public benefits. Without this key provision, the trust may render your loved one ineligible for those benefits.
Third-party trusts are funded by someone other than the beneficiary. For example, a parent, family member, or friend can fund this type of special needs trust. The founder (or settlor) can establish the trust at any time during his or her lifetime or after death through their Last Will & Testament. These trusts have a significant advantage over first-party special needs trusts because they don’t require a payback provision. This means the settlor can designate how the remaining funds are distributed after the beneficiary’s death.
Estate planning is an essential step in protecting your children’s future and legacy. If you are considering establishing a special needs trust for your loved one, consult with an experienced attorney at the Kazi Law Firm to discuss the details of your specific situation.
I built my law practice on the premise of being a life raft in a sea of sharks. I want to be an advocate for those that have been wronged and are too intimidated to seek help. My firm is here to explore your options, guide you through your legal journey, and give you that safe space to ask questions! There’s no such thing as a stupid question…Only the ones you don’t ask. So, my question to my clients is not “do you have any questions?” But rather “what questions do you have?”
As always, the Kazi Law Firm is standing by to help you in your time of need. Don’t hesitate to contact us today. We specialize in real estate law, wills & estate planning, asset protection plans, and trust creation. Family is at the core of our practice. Just as we treat our family with respect and understanding, we treat yours. Come join the Kazi Law Firm family today!
Why swim alone in shark-infested waters when you don’t need to?