Special Needs Trust

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Dog_Papa
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Special Needs Trust

Post by Dog_Papa » Sun Jan 06, 2013 5:57 pm

Does Vanguard offer a Special Needs Trust? If so is it available in all states? This would be for a person in the state of FL, who's disabled.

stlrick
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Re: Special Needs Trust

Post by stlrick » Sun Jan 06, 2013 6:59 pm

The way in which you are phrasing the question suggests that you might not understand the process. No financial institution "offers" a Special Needs Trust. To set up a Special Needs Trust for someone, you must see an attorney, and I strongly advise that you see an attorney who specializes in these trusts in the state in which the disabled person lives. It probably will cost a couple of thousand dollars in attorney fees. Vanguard does not enter the picture in any way until the Trust has been established and you are looking for an "Institutional Trustee" for the trust. An Institutional Trustee is not necessary if a family member or other trusted individual can fill the role. A discussion of Vanguard as an Institutional Trustee is here:

http://www.bogleheads.org/forum/viewtopic.php?f=2&t=107779

zotty
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Re: Special Needs Trust

Post by zotty » Sun Jan 06, 2013 11:25 pm

You can establish a trust account with vanguard if you wish to fund the special needs trust, but like the OP, you should use an attorney to draw up the trust document. After executing the document, you'll send it to vanguard with an EIN for the trust, and they'll create the account.

The linked post discusses trustee matters. Vanguard has trustee services. You don't need to use them in order to establish a trust account. Currently, I am the trustee of a special needs trust. This may or may not be good for your situation, but it's low cost.
Nadie Sabe Nada

SnowSkier
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Re: Special Needs Trust

Post by SnowSkier » Mon Jan 07, 2013 3:13 am

stlrick wrote:To set up a Special Needs Trust for someone, you must see an attorney, and I strongly advise that you see an attorney who specializes in these trusts in the state in which the disabled person lives.

+1

To help find an attorney who is likely to have experience & specialization in this area, I'd recommend going to naela.org (National Association of Elder Law Attorneys), and clicking on "Find An Attorney" to search by city, state, zip, etc.

Also, I found this book very helpful in learning about Special Needs Trusts before engaging an attorney: "Special Needs Trusts: Protect Your Child's Financial Future", by attorneys Stephen Elias & Kevin Urbatsch. Amazon has it for about $21. It's focused on special needs trusts for children with disabilities, so may or may not apply to your situation.

Good luck.

stlrick
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Re: Special Needs Trust

Post by stlrick » Mon Jan 07, 2013 9:16 am

zotty wrote:You can establish a trust account with vanguard if you wish to fund the special needs trust, but like the OP, you should use an attorney to draw up the trust document. After executing the document, you'll send it to vanguard with an EIN for the trust, and they'll create the account.

The linked post discusses trustee matters. Vanguard has trustee services. You don't need to use them in order to establish a trust account. Currently, I am the trustee of a special needs trust. This may or may not be good for your situation, but it's low cost.


Zotty clarifies something I left out in my first reply. There are three parts to the process: (1) Creating the trust, which involves an attorney. (2) Funding the trust - this is what I left out and what Zotty describes. After creating the Trust, you can make investments with Vanguard (or Fidelity, Ally, your local bank, etc). The attorney creating the trust should include getting an Employer Identification Number for it. The investment accounts are registered to this EIN rather than to anyone's social security number. Placing investments with a financial institution does not make them an Institutional Trustee. (3) Selecting trustees for the Trust, which may be an individual, a financial institution (such as Vanguard), or a combination. The Trustee is the entity with the authority to make investment selections and to decide when to spend money from the trust, and with legal responsibility to act on behalf of the beneficiary.

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jeffyscott
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Re: Special Needs Trust

Post by jeffyscott » Mon Jan 07, 2013 6:55 pm

Some states do have a pooled special needs trusts available, these may simplify the process and reduce the legal fees.

A search for "florida pooled special needs trust", may provide some leads.
press on, regardless - John C. Bogle

ddunca1944
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Re: Special Needs Trust

Post by ddunca1944 » Mon Jan 07, 2013 7:20 pm

jeffyscott wrote:Some states do have a pooled special needs trusts available, these may simplify the process and reduce the legal fees.

A search for "florida pooled special needs trust", may provide some leads.


+1
I'm in WA state and we have a "Lifetime Opportunity Trust" that is a partnership between the state and families of disabled individuals. Because the trust is pooled, the costs are minimal. $600 to open the trust (which is then credited by the state to the account).

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Dog_Papa
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Re: Special Needs Trust

Post by Dog_Papa » Mon Jan 07, 2013 9:49 pm

jeffyscott wrote:Some states do have a pooled special needs trusts available, these may simplify the process and reduce the legal fees.

A search for "florida pooled special needs trust", may provide some leads.


There's an organization that offers pooled trusts. However, they have a money mgr, I have never heard of and I doubt does better than index funds. A local bank offers this type of trust service as well. However,
Wells Fargo is known for high fees. I have noticed, none of the money mgrs give any performance figures. Hmm.....I wonder why that maybe. I have noticed in the media, they give out 5 yr info and that's it.
At least in the past, when looking at ten yr figures, performance regresses to the mean. It's real easy to spot that way. So, they don't give it out.

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FrugalInvestor
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Re: Special Needs Trust

Post by FrugalInvestor » Mon Jan 07, 2013 11:00 pm

ddunca1944 wrote:
jeffyscott wrote:Some states do have a pooled special needs trusts available, these may simplify the process and reduce the legal fees.

A search for "florida pooled special needs trust", may provide some leads.


+1
I'm in WA state and we have a "Lifetime Opportunity Trust" that is a partnership between the state and families of disabled individuals. Because the trust is pooled, the costs are minimal. $600 to open the trust (which is then credited by the state to the account).


+2
I set one up for a relative in CO who was receiving a relatively small inheritance and also used a pooled trust approved by the state. It may have been the only one available, I don't recall now, but for the relatively small amount going in it was definitely the route to go. I began with a local attorney to get some direction (I knew nothing about pooled trusts at that point) but ended up doing most of the work myself so as not to severely erode the account balance.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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