Planning a special-needs trust for a loved one in Texas requires careful attention. This type of trust helps a person with disabilities keep their eligibility for government benefits while getting extra financial support. 

However, some common mistakes can ruin the effectiveness of the trust. Understanding these mistakes can help you avoid them and provide the best care for your loved one.

Not understanding the rules

One big mistake is not fully understanding the rules for special-needs trusts. These trusts have specific requirements to protect the beneficiary’s eligibility for government benefits like Medicaid and Supplemental Security Income (SSI). Ignoring these rules can lead to losing these important benefits.

Naming the wrong trustee

Choosing the wrong trustee can also cause problems. The trustee manages the trust’s assets and makes decisions for the beneficiary. Pick someone responsible, trustworthy, and knows how to handle finances and the beneficiary’s needs. A poor choice can lead to mismanagement of funds and legal issues.

Using the trust funds incorrectly

Improper use of trust funds is another common mistake. Special-needs trusts cover specific expenses without affecting government benefits. Using the funds for the wrong purposes, like giving cash directly to the beneficiary, can harm their eligibility. Make sure the trustee knows how to use the funds properly.

Failing to plan for the future

Many people fail to plan for the future when setting up a special-needs trust. This includes not considering changes in the beneficiary’s needs, future caregivers, or changes in government benefit rules. Regularly review and update the trust to reflect any changes.

Not communicating with family members

Finally, not communicating with family members can create confusion and conflict. Make sure everyone involved understands the trust’s purpose and how it works. Clear communication helps prevent misunderstandings and ensures the trust functions as intended.

By avoiding these common mistakes, you can create an effective special-needs trust in Texas. Proper planning ensures your loved one receives necessary support while keeping their eligibility for government benefits.