How Stand-Alone Special Needs Trusts Work in Colorado

Many of us have loved ones with significant disabilities. For those of us who do, an important part of the estate-planning process can be deciding how to leave behind assets to benefit those friends or family members. In many cases, a stand-alone special needs trust (SNT) is the best choice. Also known as an “inter vivos” trust—meaning a trust that is set up during life—a stand-alone special needs trust often has significant advantages over other options.

First, an inter vivos SNT is an independent document that functions apart from other estate-planning instruments. In other words, once set up, an inter vivos trust needs neither a will nor revocable living trust to take effect.

Second, a stand-alone or inter vivos SNT can receive gifts without affecting the beneficiary’s public benefits. In addition, it is important to note that multiple people can contribute gifts to an existing inter vivos trust. Setting up a special needs trust in this way therefore will save others who may be interested in contributing the expense of creating a trust.

Third, an inter vivos SNT offers privacy and convenience. This is because, as a stand-alone document, the inter vivos SNT shields trustmakers’ estate plans from the government, banks, accountants, and more. In addition, the stand-alone formation helps ensure that funds will be available to the beneficiary as quickly as possible. Moreover, because an inter vivos SNT is operational as soon as it is created, its trustee should already be familiar with its operations before the passing of the trustmakers.

Fourth, an inter vivos SNT is less likely to be eliminated by mistake compared to other forms. This is because, when life circumstances necessitate updating one’s estate plan, it is unlikely that an inter vivos SNT would be eliminated since it is its own instrument, whereas a trust embedded within an estate plan could easily be overlooked and eliminated during the revision process.

Lastly, a stand-alone SNT is highly customizable and comprehensive. Unlike SNTs that are a mere subcomponent of an estate planning document, inter vivos SNTs generally spell out minute details and are therefore less likely to omit important information, like trustee powers or directions on how to distribute any remainder.

This is just a sampling of reasons why an inter vivos SNT is an excellent choice to support someone with special needs. Contact an estate planning law firm to obtain additional information on the benefits of the inter vivos trust.

Consult a Colorado Estate-Planning Attorney

If you have a loved one with a disability and wish to include them in your future financial plans, contact the Braverman Law Group today to discuss setting up an inter vivos special needs trust. From guardianship to special needs trusts, the Braverman Law Group assists clients in a broad range of estate planning matters related to disability. Our nationally recognized attorneys will ensure that you have the time and space needed to consider what estate-planning path is right for you and your loved one. For a free consultation with a Colorado special needs planning lawyer, call (303) 800-1588 today.