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Estate and Elder Law

FREE DOWNLOAD: Fundamentals of Special Needs Trusts – Modification

Modification Special Needs Trusts

[a] Revocable Trust vs. Irrevocable Trust

A SNT established by a third party for the benefit of a beneficiary with a disability and funded with the grantor's assets (not the assets of the beneficiary who has a disability) could certainly be created as a garden variety, revocable inter vivos trust. Since the assets of the trust are not the beneficiary's, the trust is not subject to any of the rules covering self-settled SNTs, discussed below. If the trust is revocable it is, by definition, modifiable and terminable at the whim of the grantor. Since modifying or terminating revocable trusts is inherent in their structure, they will not be discussed further here. However, it should be kept in mind that such trusts frequently become irrevocable upon the death of the grantor and, at that point, may become subject to the considerations discussed below.

[b] Irrevocable Trusts

SNTs are most commonly created as irrevocable trusts and therefore this discussion will focus on the reasons and methods for modifying irrevocable SNTs.

[c] When and Why

A properly drafted SNT will contain provisions permitting its modification at any time and for any reason that is appropriate under the circumstances. What those circumstances are will depend on the nature of the individual trust, the primary beneficiary's condition, the trust's assets and any other factors the drafter deems appropriate. On the other hand, many older SNTs and those drafted by inexperienced draftspersons lack provisions permitting modification. Unfortunately, it is the trusts lacking modification provisions that most frequently are in need of modification in order to fix problems that have arisen because of unanticipated situations....

Please click on the link at the top of the post to view or download the extended excerpt as well as the Table of Contents for Fundamentals of Special Needs Trusts.

This free download is part of Fundamentals of Special Needs Trusts, which places special needs trusts in the arsenal of tools available to an attorney to help his senior clients and those who have disabilities. It helps the practitioner to understand how she can draft a trust, using the person's own funds or the funds of another, to provide goods and services for those clients that will enhance their everyday existence.

Fundamentals of Special Needs Trusts provides practitioners with analysis of the law, authoritative advice, practice notes, checklists, and forms. It begins with a discussion of the history of special needs trusts, discusses ethical issues, explains the various types of special needs trusts and how to draft, fund, and administer those trusts, how and when to terminate them, and the relevant tax considerations.

It is a reasonably priced desk manual that is available at the LexisNexis Store and is the product of highly experienced practitioners.