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The idea of a special needs trust is pretty straightforward, but the income tax rules that apply may be anything but. Learn more.
A qualified disability trust (QDisT) is a type of trust that qualifies for tax exemptions and applies to most trusts set up for someone with special needs. Normally, you must pay income tax...
Third party special needs trusts are generally either considered “complex trusts” or “qualified disability trusts” for income tax purposes and the trust itself is responsible for reporting its own items of income, deduction, and credit.
Anyone currently administering a special needs trust or looking to establish one will need to understand the latest rules to stay compliant. Let’s break down key updates regarding special needs trusts and provide tips to make the most of these important planning tools in 2024 and beyond.
SNTs can be subject to different taxes (like gift and estate tax), but the most common one is income tax on any interest, dividends or realized gains earned by the trust’s assets.
This article discusses basic tax principles of a Special Needs Trust; hereafter referred to at times as a SNT. Each Type of Special Needs Trust (first party vs. Third party) will be considered from an income, gift and estate tax perspective.
February 2, 2024. Special Needs Trusts (SNTs) can play an important role in the financial wellbeing of people with disabilities, helping them protect their assets while still taking advantage of public benefits like Medicaid and Supplemental Security Income.