Springing Special Needs Provisions

An Estate Planning Innovation for Everyone

Early in his career, Brad Creger’s commitment to excellence in all aspects of his clients’ wealth planning drove him to co-create a “legal” solution (i.e. new trust language) to address a significant “drafting error” present in the majority of living trust and irrevocable trust documents still being drafted today.

Specifically, in 1998, Brad recognized a significant “hole” or potential problem that stems from the “ascertainable standard” language which typically governs how one’s heirs may access income and principal from the trusts which were created to protect and preserve their inheritance.

More specifically, the standardized trust language which was intended to protect an inheritance wasn’t flexible and would actually force an unintended “dis-inheritance” if any child, grandchild or other heir suffered from a birth defect, accident or illness after “mom and dad” had passed away. As soon as Brad recognized the magnitude of this potential problem, he began working on a solution and co-created what is now referred to as “contingent ascertainable standard language” or “springing special needs provisions.” What are these trust provisions and what do they do?

If the beneficiary (of a trust) had a qualifying triggering event, his/her trust could be “converted” into a “special needs trust” thereby protecting the trust’s assets while at the same time potentially allowing that same heir to also have access to both state and federal aid, if available. This would ensure that this beneficiary who was otherwise qualified for government aid would not “lose everything” paying for their own medical care due to the “forced spend down rules” governing trusts.

By preserving the trust’s assets for the “special needs” beneficiary through “springing” special needs trust language, this potentially means the difference between having only the lowest level of subsistence (provided by the government) and a chance at a more normal lifestyle (with access to additional funds provided through a special needs trust.)

Click here or use the button below to read more about Springing Special Needs Trust language in a reprint of Brad’s chapter, “Is Your Living Trust A Ticking Time Bomb?” (reprinted from this 2015 Amazon Best-Selling Book), which further describes springing special needs provisions as well as detailing the some of the common drafting problems found in today’s living trust documents. 

BFF Financial and Centaurus Financial do not provide legal advice or services.  Please consult your legal advisor regarding your specific situation.