According to the rules of a special needs trust, the grantor creates a document to put assets in the control of a trustee, who uses them to help the person with special needs, reports Nolo. The grantor then opens an account to which people can contribute to help the beneficiary.Continue Reading
Grantors set up special needs trusts to help support beneficiaries without impacting their qualifications for government benefits, explains Nolo. The trust's document stipulates a trustee, who is often the grantor, and a secondary trustee who can take over if the primary trustee is no longer able to do the job. After the Internal Revenue Service gives the trust a tax identification number, the trustee makes a small deposit to open a trust bank account. Any donors can then contribute or bequeath money or property to the trust.
Although donors can contribute any type of property such as jewelry, stocks, real estate, businesses and patents, the trustee usually has the authority to sell trust assets to raise cash for the beneficiary, according to Nolo. The trustee does not give money directly to the beneficiary but uses the money to purchase goods and services that government benefits do not cover, such as personal attendants; special therapies; travel and entertainment; and out-of-pocket medical expenses. The trustee can also use the funds for education, cellphone services, Internet services, computers and other personal items for the beneficiary.Learn more about Financial Planning