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Attorneys For Today, Counselors For Life

Attorneys For Today, Counselors For Life

Metz, Bailey & McLoughlin, LLP provides
customized estate planning and
business law services to clients
throughout Ohio

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Payback trusts and non-payback trusts

On Behalf of | Mar 15, 2022 | estate planning | 0 comments

If you are preparing to set up an estate plan for a loved one with special needs, you have different options. It is vital to go over the unique details of your circumstances and your disabled loved one’s situation in order to identify the most sensible solution that will help protect them in the future.

Special needs trusts are a great option for many disabled beneficiaries, especially since these trusts can contain assets that do not count as resources with respect to a disabled person’s eligibility for crucial government assistance. When it comes to special needs trusts, you should understand the differences between payback and non-payback trusts.

Comparing payback and non-payback trusts

The Ohio Developmental Disabilities Council provides helpful information on special needs trusts. According to the ODDC, there are two categories of special needs trusts that permit the accumulation of assets without counting toward a disabled individual’s resource limit, payback and non-payback trusts.

When someone with special needs dies and they have assets in a payback trust, the assets go to the state or they remain in the trust to help other people with special needs. With a non-payback trust, assets that remain in the trust following a beneficiary’s death are left to the trustee and split up according to the trustmaker’s instructions.

Creating a special needs trust

Whether you decide to move forward with a payback trust or a non-payback trust, it is essential to understand your options. Make sure you understand the key terms associated with this facet of estate planning and find answers to any questions that you have.

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